Problem:
Ashley Cambry is planning for her retirement. She already has $12,500 in a retirement plan and will deposit $500 a month for the next 20 years. Her account manger says she will be earning 8.00% on an annual basis on this account at the time of retirement and Ashley plans to withdraw a sum each month during her 15 retirement years and then leave $120,000 to the College at the end of 15 ears to furnish a student lounge. During retirement her account will be earning a 6.00% return on an annual basis.
Q1. How much will Ashley be able to withdraw each month during retirement?
Q2. Instead of 6.00% what would Ashley's rate-of-return after retirement have to be so that she could withdraw $3,500 a month and still leave the same amount for the student lounge?