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    Calculating the retirement payments

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    An engineer on the verge of retirement has accumulated savings of $200,000 in an account paying 10% compounded quarterly.

    1. The engineer wishes to withdraw $7000 each quarter for living expenses. For how long can he/she withdraw that full amount?

    10 years
    12.5 years
    15 years
    25 years
    For as long as he/she lives.

    2. How much can he/she withdraw quarterly if he/she expects to live for only ten years after retirement?

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    https://brainmass.com/economics/principles-of-mathematical-economics/calculating-retirement-payments-503821

    Solution Preview

    1. The engineer wishes to withdraw $7000 each quarter for living expenses. For how long can he/she withdraw that full amount?

    Interest rate per quarter=i=10%/4=2.5%

    Periodic amount=R=$7000
    PV of ...

    Solution Summary

    Solution describes the steps to calculate the time period within which a certain fund will be exhausted given a fixed periodic withdrawal. It also calculates the maximum withdrawal per period if expected life is given.

    $2.19

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