Alicia has a job with a dc regulator that offers a terrific benefit package. The agency contributes an annuity of $520 into a bank account in her name at the end of each month, beginning one month from today. Alicia estimates that she will work for the next 27 years (for 324 months), when at that point she'll retire. At the time of her retirement, alicia plans to withdrawal monthly amounts for 25 consecutive years (for 300 months), beginning at the end of the first retirement month. Assuming an interest rate of 9% annually, the maximum amount alicia will be able to withdrawal, per month, during her retirement years is $711,107.238
Monthly deposit (D) = $520
Annual interest rate (I) = 9%
Number of deposits (N) = 12 x 27 = 324
Account balance [tex]$=D \times \frac{\left(1+\frac{I}{12}\right)^N-1}{\frac{I}{12}}$[/tex]
Account balance [tex]$=\$ 520 \times \frac{\left(1+\frac{9 \%}{12}\right)^{324}-1}{\frac{9 \%}{12}}$[/tex]
Account Balance[tex]$=\$ 711,107.238$[/tex]
Determine the account balance at the retirement, using the monthly compounding interest
Complete question: alicia has a job with a dc regulator that offers a terrific benefit package. the agency contributes an annuity of $520 into a bank account in her name at the end of each month, beginning one month from today. alicia estimates that she will work for the next 27 years (for 324 months), when at that point she'll retire. at the time of her retirement, alicia plans to withdrawal monthly amounts for 25 consecutive years (for 300 months), beginning at the end of the first retirement month. assuming an interest rate of 9% annually, what is the maximum amount alicia will be able to withdrawal, per month, during her retirement years?
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