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File Home nsert Page Layout romanos Queries & Connections From Table/ Recent Refresh SortF osvweb Connections Etli ks Get & Transform Data Queries & Connections Sort 25 You are planning to save for retirement over the next 15 years. To do this, you will invest $18,000 a year (at the beginning of each year) in a retirement account. The return on the account is expected to bo 11 percent. How much can you withdraw each year during retirement assuming a 20-year withdrawal period? You can solve this problem either using an Excel function or use the table provided below.The final answer should be provided in Cell 83 Deposit amount wthdraw amount,X nterest rate 18,000 11 00% In bank, before End of year deposit or withdrawal Deposit or withdrawal interest earningbalance Year during a year with interest 10 12 13 14 15 16 17 18 19 20 21 24 25 26 27 30 31

Explanation / Answer

Withdrawal Amount, X = $77,768.55 (this is if the withdrawal is done at the start of the year)

The table is provided below:

If the withdrawal is done at the end of the year then answer will be = 86,323.09

Thus, if withdrawal is done at the start of the year answer is $77,768.55

If the withdrawal is done at the end of the year the answer is $86,323.09

Deposit amount 18,000.00 Withdrawal amount, X 77,768.55 Interest rate 11.00% Year In bank, before deposit or withdrawal Deposit or withdrawal Interest earned during the year End of the year balance with interest 1 0.00 18,000.00 1,980.00 19,980.00 2 19,980.00 18,000.00 4,177.80 42,157.80 3 42,157.80 18,000.00 6,617.36 66,775.16 4 66,775.16 18,000.00 9,325.27 94,100.43 5 94,100.43 18,000.00 12,331.05 124,431.47 6 124,431.47 18,000.00 15,667.46 158,098.93 7 158,098.93 18,000.00 19,370.88 195,469.82 8 195,469.82 18,000.00 23,481.68 236,951.50 9 236,951.50 18,000.00 28,044.66 282,996.16 10 282,996.16 18,000.00 33,109.58 334,105.74 11 334,105.74 18,000.00 38,731.63 390,837.37 12 390,837.37 18,000.00 44,972.11 453,809.48 13 453,809.48 18,000.00 51,899.04 523,708.52 14 523,708.52 18,000.00 59,587.94 601,296.46 15 601,296.46 18,000.00 68,122.61 687,419.07 16 687,419.07 -77,768.55 67,061.56 676,712.08 17 676,712.08 -77,768.55 65,883.79 664,827.32 18 664,827.32 -77,768.55 64,576.47 651,635.24 19 651,635.24 -77,768.55 63,125.34 636,992.03 20 636,992.03 -77,768.55 61,514.58 620,738.07 21 620,738.07 -77,768.55 59,726.65 602,696.17 22 602,696.17 -77,768.55 57,742.04 582,669.66 23 582,669.66 -77,768.55 55,539.12 560,440.23 24 560,440.23 -77,768.55 53,093.89 535,765.57 25 535,765.57 -77,768.55 50,379.67 508,376.69 26 508,376.69 -77,768.55 47,366.90 477,975.04 27 477,975.04 -77,768.55 44,022.71 444,229.21 28 444,229.21 -77,768.55 40,310.67 406,771.33 29 406,771.33 -77,768.55 36,190.31 365,193.09 30 365,193.09 -77,768.55 31,616.70 319,041.24 31 319,041.24 -77,768.55 26,540.00 267,812.69 32 267,812.69 -77,768.55 20,904.86 210,949.00 33 210,949.00 -77,768.55 14,649.85 147,830.30 34 147,830.30 -77,768.55 7,706.79 77,768.55 35 77,768.55 -77,768.55 0.00 0.00

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