In order to save for retirement, Debbie makes the first of 10 equal annual deposits into an investment on Sept. 29, 2011. She believes the investment will earn 10% per yr. The last deposit will be made on Sept. 28 2020. The deposit must be sufficient size to enable debbie to make 30 equal annual withdrawals of 50,000 starting on Sept. 28 2031.What must the size of the deposits be for the above plan to work.
Assume that debbie makes the 10 deposits as planned and makes the first two 50,000 withdrawals on sept 28 2031 2032. On Sept 2032 she finds out that the investment has only been yielding 6% since the time of the first deposit. Expecting to live the following the 28 yrs. How much must debbie cut back on her lifestyle.
Whats the maximum constant amount she can withdrawal for each of the remaining 28 yrs. starting in 2033 if the interest rate remains at a true 6%.