Question 9 10 points D dl You have accumulated some money fo

Question 9 (10 points) D dl You have accumulated some money for your retirement. You are going to withdraw $45,500 every year at the end of the year for the next 20 years. How much money have you accumulated for your retirement? Your account pays you 7.5% percent per year compounded annually? To answer this question, you have to find the present value of these cash flows. Round the answer to two decimal places All the work has to be shown!

Solution

Annual Withdrawals = $ 45500, Interest Rate = 7.5 % per annum compounded annually, Withdrawal Tenure = 20 years

Accumulation = 45500 x (1/0.075) x [1-{1/(1.075)^(20)}] = $ 463849.36