Question

Today, you are retiring. You have a total of $289,416 in your retirement savings. You want to withdraw $2,500 at the beginning of every month, starting today and expect to earn 4.6 percent, compounded monthly.

How long will it be until you run out of money?

I need to solve it with this calcualter , please, ( Texas Instruments - BA II Plus) step by step.

Thank you so much for your time and your help

Answer 1

Before we move to steps on calculator, let us first decide the inputs for this question in calculator.

PMT = $2,500, PV = - $289,416 (Negative sign indicate that it is cash outflow), r = 4.6%/12 = 0.3833%, FV = 0, we need to calculate N.

Steps for Calculator:

Step 1: Everytime you work on a financial calculator, it is always a good practice to clear the memory registers of your calculator. To clear time value of money (TVM) worksheet, Press [2^nd] [CLR TVM] [2^nd] [Quit]

Now, we will start putting the inputs.

Step 2: Enter 289,416 (through number key pad). Press [+/-], so that a 'minus' sign is indicated. Now press [PV].

Step 3: Enter 0.3833. Press [i/Y].

Step 4: Enter 2,500. Press [PMT].

Step 5: Enter 0. Press [FV].

Step 6: Press [CPT] [N]. This would display 153.31

This means you can withdraw $2500 per month for 153.3 months (or 12.8 years). Answer