A woman turns 30 today and wishes to withdrawal a perpetuity of $1000 at the beginning...
A woman turns 30 today and wishes to withdrawal a perpetuity of $1000 at the beginning of each month starting on her 65th birthday. Starting today, she makes monthly contributions of X to a fund. The last contribution is one month before her 65th birthday. The fund earns a nominal rate of 8% compounded monthly during contribution period and 5% compounded monthly during withdrawal period. Calculate X
Homework Answers
Hello
YOUR REQUIRED ANSWER IS PMT = $104.37
A woman wants to withdraw $1000 every month in perpetuity starting from her 65th birthday.
Hence,
Now, FV = $401,000
Using excel function, "=PMT(8%/12,25*12,0,-241000,1)", we get PMT = $104.37
Thanks!
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