Final answer:
To be able to withdraw $35,000 each year for 15 years with a 5% interest rate, you would need approximately $384,542.85 in your account at the beginning.
The total money put out of the account would be $525,000, and the interest would result in a loss of $140,457.15.
Step-by-step explanation:
To determine how much money you need in your account at the beginning to be able to withdraw $35,000 each year for 15 years with a 5% interest rate, you can use the formula for the present value of an annuity.
The formula is: PV = A * ((1 - (1+r)^(-n))/r)
( where PV is the present value or the initial amount you need, A is the annual withdrawal amount, r is the interest rate, and n is the number of years).
Plugging in the values, we get:
PV = $35,000 * ((1 - (1+0.05)^(-15))/0.05)
= $384,542.85
Therefore, you would need approximately $384,542.85 in your account at the beginning.
To calculate the total money you would put out of the account, you can simply multiply the annual withdrawal amount by the number of years:
Total money put out = $35,000 * 15
= $525,000
The amount of money that is interest can be calculated by subtracting the total money put out from the initial amount in your account:
Interest = $384,542.85 - $525,000
= -$140,457.15
Since the interest value is negative, it means that the total amount put out of the account is greater than the initial amount you need, resulting in a loss.