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What is the maximum amount you can withdraw

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You have discovered a magical elixir that will allow you to live forever. You subsequently sold the rights to that elixir for $15,000,000 and have invested that money at 10% interest. The expected inflation rate is 2.5% forever. Finally, you wish to pay for your daughter's wedding which you estimate will occur in 25 years. Measured in today's dollars, you plan to spend $500,000 on the wedding.

Assuming that you plan to never work again and that you wish to have the same purchasing power each year (excluding the wedding cost) during your retirement, what is the maximum amount you can withdraw during your first year of retirement?

For simplicity, assume that the first withdrawal will occur in one year, the second in two years, etc.

Reference no: EM131824278

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