2.6.1: Exercises

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Leah Griffith, Veronica Holbrook, Johnny Johnson & Nancy Garcia
Rio Hondo College

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Section 2.6.1 Exercises

You want to be able to withdraw $30,000 each year for 25 years. Your account earns 8% interest compounded annually.
1. How much do you need in your account at the beginning?
2. How much total money will you pull out of the account?
3. How much of that money is interest?
How much money will I need to have at retirement so I can withdraw $60,000 a year for 20 years from an account earning 8% compounded annually?
1. How much do you need in your account at the beginning
2. How much total money will you pull out of the account?
3. How much of that money is interest?
You have $500,000 saved for retirement. Your account earns 6% interest compounded monthly. How much will you be able to pull out each month, if you want to be able to take withdrawals for 20 years?
Loren already knows that he will have $500,000 when he retires. If he sets up a payout annuity for 30 years in an account paying 10% interest compounded monthly, how much could the annuity provide each month?