Today,you are retiring. You have a total of $413,926 in your retirement savings and have the funds invested such that you expect to earn an average of 3%,compounded monthly,on this money throughout your retirement years. You want to withdraw $2,500 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 B because the formula for calculating the number of months until you run out of money is:Months = (PV * (1 - (1 + r)^-n)) / (r * PMT)where:PV = present value of your retirement savingsr = monthly interest raten = number of monthsPMT = monthly withdrawal amountPlugging in the given values, we get:Months = (413,926 * (1 - (1 + 0.03/12)^-n)) / (0.03/12 * 2,500)= 213.29 months

Today,you Are Retiring