Compound Interest: A calculated depletion of one's retirement account

Question

If my savings account has P dollars gaining r percent each year and I want to withdraw D dollars monthly until zero dollars remain after N years, how much do I withdraw each month?

Answer 1

This is the exact same structure as a loan. Instead of taking out a loan from the bank and making a monthly payment. You are making a loan to the bank and the are making a monthly payment to you.. The Are N years or 12N paymnts. Interest is compounded 12 times per year so the periodic or monthly interest rate is r/12. The Present Value of the payment stream is the amount you are lending to the bank (making a deposit) Is P =D*Multiplier.

The Multiplier+ (1/(r/12))*(1-(1/(1+r/12))¹²ⁿ) Payment or Withdrawal is simply

D=P/Multiplier

Hope this helps

Lenny