Question

You have $25,000 in an account earning an interest rate of 4.8%. What are the equal monthly withdrawals you can make from this account, starting one month from today, before it is depleted in 15 years?

Answer 1

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N => 15 * 12 = 180 (As withdrawal will be monthly for 15 years, so 180 total withdrawals)

PV = -25,000 (The starting balance of the account is 25,000)

I/Y => 4.8% / 12 = 0.4% ( The interest rate is 4.8% per year, so monthly it will be divided by 12 )

FV = 0 (The account will be depleted after 15 years, so zero)

CPT + PMT = 195.1036

So the equal monthly withdrawal from this account will be $195.1036