To calculate the amount that a person would have to take out $600 a year for 7 years from an account earning 6 percent, we can use the present value of an annuity formula, which is:
PV = PMT x [(1 - (1 / (1 + r)^n)) / r]
where PV is the present value of the annuity, PMT is the amount of each payment, r is the interest rate per period, and n is the number of periods.
In this case, PMT is $600, r is 6% or 0.06, and n is 7. We can calculate the time value factor using the formula:
Time value factor = (1 - (1 / (1 + r)^n)) / r
Time value factor = (1 - (1 / (1 + 0.06)^7)) / 0.06
Time value factor = 4.868
Now we can calculate the present value of the annuity using the formula:
PV = PMT x time value factor
PV = $600 x 4.868
PV = $2,920.80
Therefore, the amount a person would have to have in an account earning 6 percent in order to take out $600 a year for 7 years would be $2,920.80.