A sum of $25,000 is deposited into a savings account, which pays 8% interest com

Question

A sum of $25,000 is deposited into a savings account, which pays 8% interest
compounded semiannually. Equal annual withdrawals are to be made from the account,
beginning 1 year from now and continuing forever. The maximum amount that can be
withdrawn at the end of each year is approximately equal to ____________.
A) $2,250
B) $2,000
C) $2,300
D) $2,040

For answer to be rated 5 stars, please show equation for the problem and enough work. No ambiguity. Just answer will not be rated, MUCH APPRECIATED!

Explanation / Answer

Let it be x. Then x*((1/(1.04^2))+(1/(1.04^4))+(1/(1.04^6))+(1/(1.04^8))....) = 25000 =>x = 2040........Option D

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