A person in retirement is depositing $300,000 in a saving account that pays 5% i

Question

A person in retirement is depositing $300,000 in a saving account that pays 5% interest per year. The person plans to withdraw money from the account once a year. He starts by withdrawing $25,000 after the first year, and in future years he increases the amount he withdraws according to the inflation rate. For example, if the inflation rate is 3%, he withdraws $25,750 after the second year. Write a program that calculates the number of years the money in the account will last assuming a constant yearly inflation rate of 2%. Make a plot (bar chart) in MATLAB that shows the yearly withdrawals and the balance of the account over the years. A person in retirement is depositing $300,000 in a saving account that pays 5% interest per year. The person plans to withdraw money from the account once a year. He starts by withdrawing $25,000 after the first year, and in future years he increases the amount he withdraws according to the inflation rate. For example, if the inflation rate is 3%, he withdraws $25,750 after the second year. Write a program that calculates the number of years the money in the account will last assuming a constant yearly inflation rate of 2%. Make a plot (bar chart) in MATLAB that shows the yearly withdrawals and the balance of the account over the years. A person in retirement is depositing $300,000 in a saving account that pays 5% interest per year. The person plans to withdraw money from the account once a year. He starts by withdrawing $25,000 after the first year, and in future years he increases the amount he withdraws according to the inflation rate. For example, if the inflation rate is 3%, he withdraws $25,750 after the second year. Write a program that calculates the number of years the money in the account will last assuming a constant yearly inflation rate of 2%. Make a plot (bar chart) in MATLAB that shows the yearly withdrawals and the balance of the account over the years.

Explanation / Answer

% MATLAB script

year=0
P = 300000
D=25000
x = [P]
y = [D]
% while loop execution
while( P>0 )
   interest = 0.05 * P;
   P = P + interest;
   x(end+1) = P;
   inflation = 0.02 * D;
   D = D + inflation;
   y(end+1) = D;
   P = P - D;
   year = year + 1;
end
fprintf("Total years required is %d", year);

% Printing the Bar Chart

bar(x,y);

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