You currently have $600,000.00 in the bank and intend to withdrawal $60,000.00 from the account annually beginning next year. Assuming the account earns 10% annually, how long can you keep withdrawing $60,000.00 from the account?
A)10 years
B)Forever
C)30 years
D)50 years

Question

Quizplus · Accepted Answer

This scenario describes a perpetual withdrawal situation where the annual interest earned (10% of $600,000 = $60,000) equals the annual withdrawal amount. Therefore, the principal remains intact, allowing withdrawals to continue indefinitely.

You Currently Have $600,000