question archive You have just retired with savings of $6 million
You have just retired with savings of $6 million
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You have just retired with savings of $6 million. If you expect to live for 58 years and to earn 13% a year on your savings, how much can you afford to spend each year (in $ dollars)? $_ (Assume that you spend the money at the start of each year.)
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You need to use a Financial calculator to solve this problem. You can download it.
N = 58 (You expect to live for 58 years)
PV = -6,000,000 (The present value of the savings is 6M)
FV = 0 (The savings will be spent in full after 58 years)
I/Y = 13 (Annual earning rate is 13%)
CPT + PMT = 780,651.48
You can afford to spend $780,651.48 each year.
