Steven White is considering taking early retirement, having saved $400,000. White desires to determi

Discussion in 'Banking' started by Skina Jindal, Aug 24, 2017.

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  1. Skina Jindal

    Skina Jindal New Member

    Steven White is considering taking early retirement, having saved $400,000. White desires to determine how many years the savings will last if $40,000 per year is withdrawn at the end of each year. White feels the savings can earn 10 percent per year. a. 12 years b. 15 years c. 14.5 years d. 10 years
     
    Skina Jindal, Aug 24, 2017
    #1
  2. Jayesh Mourya

    Jayesh Mourya New Member

    It should be forever coz every year he earns 40k and he withdraws that so net 4 lakh remains
     
    Jayesh Mourya, Aug 24, 2017
    #2
  3. Karan Gupta

    Karan Gupta Member

    It is a present value of annuity (PVIFA) problem is it not?
     
    Karan Gupta, Aug 24, 2017
    #3
  4. Karan Gupta

    Karan Gupta Member

    I used FVIFA formula - and got 1.1^n = 2 where n = 8 years.
     
    Karan Gupta, Aug 24, 2017
    #4

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