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Upon retirement, Juanita moves her whole retirement account into a new account earning 4.7% annually. If...

Upon retirement, Juanita moves her whole retirement account into a new account earning 4.7% annually. If Juanita wishes to withdraw from her account quarterly and she plans on her retirement account lasting for 20 years, what amount can she withdraw each quarter?

Math   Statistics-And-Probability   
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Answer #1

Let the whole retirement Amount after retirement be X. Now we need to find the fraction of this X that could be withdrawn each quarter for 20*4 = 80 quarters. The present value of those 80 cashflows would be X. Therefore each payment value is computed as:

Therefore about 1.92% of the whole retirement account could be withdrawn each quarter for 20 years.

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