Find an expression for the amount of the withdrawal

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Reference no: EM131988479

Smith retires on January 1, 2004. She deposits 500,000 in an account earning effective annual interest at i = .10, with interest credited every December 31.

Smith withdrawals 1/19 0f the balance in the account on January 1, 2005, 1/18 of the balance on January 1, 2016, ...., 1/2 of the balance on January 1, 2022, and the entire balance on January 1, 2023.

Find an expression for the amount of the withdrawal on January 1, 2004 +/t, for t = 1, 2, ....19. This is not as unusual a situation as it might first appear.

It is similar to the minimum required withdrawal pattern for annual withdrawals per year from a "matured" RRSP in Canada.

Reference no: EM131988479

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