Final answer:
To find out how many dollars in withdrawals per year would reduce your nest egg to zero in 20 years, you can use the formula for compound interest.
Step-by-step explanation:
To find out how many dollars in withdrawals per year would reduce your nest egg to zero in 20 years, you can use the formula for compound interest:
A = P(1 + r/n)^(nt)
By substituting the given values into the formula, you can solve for the annual withdrawals:
0 = 97,000(1 + 0.04/1)^(1*20)
0 = 97,000(1.04)^20
Dividing both sides of the equation by 97,000 results in:
0 = (1.04)^20
By using a calculator or software to evaluate the expression (1.04)^20, you can find out the annual withdrawals that will reduce your nest egg to zero in 20 years.