3.Your father has been working since he was sixteen years old. He is now 60 and looking forward to retiring in another 5 years. When he retires, he expects to have $1,000,000 in his pension fund with the expectation of the fund yielding 4.2% during his retirement. Your dad is likely to live until he is about 83 years old, how much can he withdraw from his pension fund each month during the remaining years of his life?
The professor gave us the answer of 6,605.78 but I can't figure out how.
I assumed I could just use the Future value formula but that does not give me the right answer. If he retires at 65 and dies at 83 that means his retirement lasts 18 years and so that's 216 payments he'll receive, but when I plug in the numbers they just don't add up.
The professor gave us the answer of 6,605.78 but I can't figure out how.
I assumed I could just use the Future value formula but that does not give me the right answer. If he retires at 65 and dies at 83 that means his retirement lasts 18 years and so that's 216 payments he'll receive, but when I plug in the numbers they just don't add up.