Today, you are retiring. You have a total of $518,304 in your retirement savings and have the funds invested such that you expect to earn an average of 6%, compounded monthly, on this money
Throughout your retirement years. You want to withdraw $3,500 at the beginning of every month,
Starting today. How long will it be until you run out of money?

Question

Quizplus · Accepted Answer

The correct answer is A because the present value of the withdrawals is $518,304, and the monthly interest rate is 6% / 12 = 0.5%. The number of months until the money runs out is:PV = PMT * [1 - (1 + r)^-n] / r518,304 = 3,500 * [1 - (1 + 0.005)^-n] / 0.005n = 268 months268 months / 12 = 22.3 years

Today, You Are Retiring