Question

Mr. Aji has $ 500,000 invested at an interest rate of 5.5% per annum and now...

Mr. Aji has $ 500,000 invested at an interest rate of 5.5% per annum and now he wants to retire. He wants "immediately" to take out $ 45,000 at the start of each year.

Question

How many withdrawals (with each withdrawal of $ 45,000) can he make from his savings so that in the end he still leaves a balance of $ 50,000.

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Answer #1

Answer:

Deposit Amount - $500,000

Withdrawal Amount - $45,000

Year Deposit Amount after Withdrawal Interest Amount Balance Amount
1 455000 25025 480025
2 435025 23926.375 458951.375
3 413951.375 22767.32563 436718.7006
4 391718.7006 21544.52853 413263.2292
5 368263.2292 20254.4776 388517.7068
6 343517.7068 18893.47387 362411.1806
7 317411.1806 17457.61493 334868.7956
8 289868.7956 15942.78376 305811.5793
9 260811.5793 14344.63686 275156.2162
10 230156.2162 12658.59189 242814.8081
11 197814.8081 10879.81444 208694.6225
12 163694.6225 9003.204239 172697.8268
13 127697.8268 7023.380472 134721.2072
14 89721.20723 4934.666398 94655.87363
15 49655.87363 2731.07305 52386.94668
16 7386.946683 406.2820675 7793.22875

He can make 15 withdrawals from his savings so that in the end he still leaves a balance of $ 50,000.

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