Question

How much would greg need to have on deposit at retirement in order to withdraw $ 35,000 annually over the 15 years if the retirement fund earns 4 percent?

Answer 1

This is the equivalent problem as an amortization problem.
Given:
Annual payout, A = 35000
Interest, i = 4% per annum
number of periods, n = 15

Need present value.

`P=(A*((1+i)^n-1))/(i*(1+i)^n)`

`P=(35000*((1+.04)^(15)-1))/(.04*(1+.04)^(15))`
=389143.56 to the nearest cent.