Imagine you have a bank account as your only source of income. It has a balance of $300,000 and the interest rate you earn is 4% per year. What amount in annual withdrawals will make it possible for you to sustain that level of consumption?

Imagine you have a bank account as your only source of income. It has a balance of $300,000 and the interest rate you earn is 4% per year. What amount in annual withdrawals will make it possible for you to sustain that level of consumption?

Survey Of Economics

10th Edition

ISBN:9781337111522

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter17: Federal Deficits, Surpluses, And The National Debt

Section17.3: Why Worry Over The National Debt?

Problem 1YTE

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Imagine you have a bank account as your only source of income. It has a balance of $300,000 and the interest rate you earn is 4% per year. What amount in annual
withdrawals will make it possible for you to sustain that level of consumption?

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