Your uncle just won the weekly lottery, receiving $375,000, which he invested at a 7.5% annual rate. He now has decided to retire, and he wants to withdraw $35,000 at the end of each year, starting at the end of this year. What is the maximum number of whole payments that can be withdrawn before the account is exhausted, i.e., before the account balance would become negative? (Hint: Round down to the nearest whole number.)

Respuesta :

Answer:

22

Explanation:

Calculation to determine the maximum number of whole payments that can be withdrawn

Based on the information given we would be using financial calculator to determine the maximum number of whole payments that can be withdrawn which represent N

PV -$375,000

PMT $35,000

I 7.50% Annual rate

FV $0

N ?

Hence;

N=22

Therefore the maximum number of whole payment that can be withdrawn will be 22