How much money would you need to have at retirement so that you can withdraw $50,000 a year for 20 years from an account earning 7% compounded annually? How much total money would you pull out of this account?

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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How much money would you need to have at retirement so that you can withdraw $50,000 a year for 20 years from an account earning 7% compounded annually? How much total money would you pull out of this account?

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Present value of annuity concept is required to use in this case. Present value of annuity is the present value of the same amount of cash flows that occurs for every period in future for certain period.

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