You deposit $4500 per year at the end of each of the next 25 years into an accou

Question

You deposit $4500 per year at the end of each of the next 25 years into an account that pays 10% compounded annually. How much could you withdraw at the end of each of the 20 years following your last deposit if all withdrawls are the same dollar amount?(The twenty-fifth and last deposit is made at the beginning of the 20 year period.The first withdrawl is made at the end of the first year in the 20 year period.)

Explanation / Answer

FV at the end of 25th year= PV of next 20 years => 4500*(1.1^25-1)/0.1) = a*(1.1^20-1)/(0.1*1.1^20) (where a is annual withdrawal in 20 year period) a = 51983.1 ($) (ANSWER)

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