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    A husband and wife contribute $4,000 per year to an IRA paying 10%, compounded annually, for twenty years. What is the value of their IRA? How much can they withdraw each year for 25 years at 10% compounded annually?

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    What is the value of their IRA?

    Equal contribution = $4,000
    No of years=n= 20
    Rate of interest=r= 10.00%
    To calculate the value of the IRA amount we need to calculate / read from tables the values of
    FVIFA= Future Value Interest Factor for an Annuity
    The formula for FVIFA is
    FVIFA( n, r%)= =[(1+r%)^n -1]/r%

    FVIFA (20 periods, 10.% rate)= 57.2750

    Amount at the end of 20 years= Annual amount deposited ...

    Solution Summary

    Calculates the amount of annual withdrawal froma fund.