Debbie has $368,882 accumulated in a 401K plan. The fund is earning a low, but safe, 3% a year. The withdrawals will take place annually starting today. How soon will the fund be exhausted if Debbie withdraws $30,000 each year?
A)15 years.
B)16 years.
C)14 years.
D)12.3 years.$368,882 $30,000 = 12.29607 For PVAD of $1 factor of 12.29607 and i of 3%, n = 15

Question

Quizplus · Accepted Answer

The present value of an annuity due formula is used to determine how long the funds will last. With a present value of $368,882, annual withdrawals of $30,000, and an interest rate of 3%, the fund will last approximately 15 years.

Debbie Has $368,882 Accumulated in a 401K Plan