You want to be able to withdraw $30,000 each year for 25 years. your account earns 8% interest compounded annually.
a. how much do you need in your account at the beginning?
b. how much total money will you pull out of the account?
c. how much of that money is int

amount is $320243.25 need in your account at the beginning

Money pull in 25 years is $750000

money interest is $429756.75

Step-by-step explanation:

Given data

principal (P) = $30000

time (t) = 25 years

rate (r) = 8% = 0.08

to find out

amount need in beginning, money pull out , and interest money

solution

We know interest compounded annually so n = 1

we apply here compound annually formula i.e.

amount = principal ( 1 - / r/k

now put all these value principal, r , n and t in equation 1

amount = 30000 ( 1 - / 0.08/1

amount = 30000 × 0.853982  / 0.08

amount = $320243.25 need in your account at the beginning

Money pull in 25 years is $30000 × 25 i.e

Money pull in 25 years is $750000

money interest = total money pull out in 25 years - amount at beginning need

money interest = $750000 - $320243.25

money interest = $429756.75

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