Question

I currently have $15,000 in my account. The effective rate on the savings account is 10%. What is the size of the beginning of month payments that can be withdrawn over a period of 5 years?

Answer 1

	Annuity payment from today=	P/ [{ [1- (1+r)-(n-1) ]/r }+1]
P=	Present value	15,000.00
r=	Rate of interest per period
	Rate of interest per annum	10%
	Payments per year	12.00
	Rate of interest per period	0.833%
n=	number of payments:
	Number of years	5
	Payments per year	12.00
	number of payments	60
	Annuity payment=	15000/ [{ (1- (1+0.00833)^-(60-1))/0.008333 }+1]
	Annuity payment=	316.07

Monthly payment that starts from beginning of month is $316.07 for five years.