How much would Greg need to have on deposit at retirement in order to withdraw $35000 annually over the 15 years if the retirement fund earns 4 percent?

Question

How much would Greg need to have on deposit at retirement in order to withdraw $35000 annually over the 15 years if the retirement fund earns 4 percent?

Answer 1

Let p = principal

 

Let I = total income

 

r =

 

We would use this equation:

 

I = p(1 +  r)^t

 

r = .04

t = 15

I = $35000 * 15 = $525000

 

p = I/(1 + r)^t = (525000)/(1.04)^15 = $525000/1.801 = $291514