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Congratulations, you have saved well and are ready to begin your retirement. If you have $1,750,000.00 saved for your retirement and want it to last for 40 years, and will earn 10.8% compounded monthly: What is the amount of the monthly distribuion? 216.50 How much interest is earned in retirement?

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Answer to a math question Congratulations, you have saved well and are ready to begin your retirement. If you have $1,750,000.00 saved for your retirement and want it to last for 40 years, and will earn 10.8% compounded monthly: What is the amount of the monthly distribuion? 216.50 How much interest is earned in retirement?

Expert avatar
Jayne
4.4
94 Answers
Convert Annual interest to monthly interest rate Monthly interest rate= 10.8/12=0.9 Calculate the number of monthly payments Total number of monthly payments= 40*12= 480 Calculate Monthly Distribution PMT=P*r/(1-(1+r)^-n) where p= initial savings r= monthly interest rate n= number of payments PMT=1750000*0.009/(1-(1+0.009)^-480 PMT= 15600.92 Interest Earned = Total Amount Paid- Initial Savings Total Amount Paid= PMT*Number of Payments Total Amount Paid= 15600.92*480=7489767.51 Interest Earned = 7489767.51 - 1750000=5739767.51 Therefore, A) Amount of monthly distribution= $15600.92 B)Interest Earned= $5739767.51

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