Norah has $2,000,000 in her retirement account. She wants to make 20 equal withdrawals, beginning today and each year thereafter. The investment plan earns 8%. What is the amount of annual withdrawals that would completely deplete the fund after the 20th withdrawal?
A) $181,541
B) $184,875
C) $188,615
D) $203,704

Question

Quizplus · Accepted Answer

The problem is a present value of annuity due problem. Using the formula for annuity due, the annual withdrawal amount is calculated to be approximately $188,615.

Norah Has $2,000,000 in Her Retirement Account