question archive You have just retired with savings of 56 million

You have just retired with savings of 56 million

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You have just retired with savings of 56 million. If you expect to live for 5 years and to earn 13% a year on your savings, how much can you afford to spend each year in s dollars) $ (Assume that you spend the money at the start of each year.)

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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.