Retirement plan problem, You decide to open a retirement

Retirement plan problem

Reference no: EM13684341

You decide to open a retirement account at your local bank that pays eight percent/year/month (eight percent per year compounded monthly). For the next 20 years, you will deposit $600 per month into the account, with all deposits and withdrawals occurring at month's end. On the day of the last deposit, you will retire. Your expenses through the first year of retirement will be covered by your company's retirement plan. As such, your first withdrawal from your retirement account will occur on the day exactly 12 months after the last deposit.

1. What monthly withdrawal can you make if you want the account to last 25 years?

2. What monthly withdrawal can you make if you want the account to last forever (with infinite withdrawals)?

Reference no: EM13684341

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