In order to save for his retirement, Dale Falcinelli makes the first of 8 equal annual deposits into an investment on June 6, 2014.He believes the investment will always earn 10% a year. The last deposit will be made on June 6, 2021. The deposits must be of sufficient size to enable Mr. Falcinelli to make 30 equal annual withdrawals of $80,000 starting on June 6, 2026.
Assume that he makes the 8 deposits as planned and makes the first two $80,000 withdrawals in 2026 and 2027. On the evening of June 6, 2027, Mr. Falcinelli makes a horrifying discovery: the investment has been yielding only 5% since June 6, 2017. Fully expecting to still live another 28 years, he knows he must drastically cut back on his lavish life style.
What's the maximum constant amount he can withdraw for each of the remaining 28 years, starting June 6, 2028 if the interest rate continues to stay at 5%?