Offers terrific benefit package

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Reference no: EM132042944

Alicia has a job with a DC regulator that offers a terrific benefit package. The agency contributes an annuity of $510 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 38 years (for 456 months), when at that point she'll retire. At the time of her retirement, Alicia plans to spend this bank account by drawing a monthly annuity until her projected mortality, Specifically, she will withdrawal her first monthly amount immediately at retirement, and then monthly for 25 consecutive years in retirement. Assuming an interest rate of 3% annually, what is the maximum amount Alicia will be able to withdrawal, per month, during her retirement years?

Reference no: EM132042944

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