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Jimmy has $167,933 accumulated in a 401K plan. The fund is earning a low, but safe, 3% per year. The withdrawals will take place at the end of each year starting a year from now. How soon will the fund be exhausted if Jimmy withdrawals $31,000 each year

Respuesta :

Tundexi

Answer:

6 years

Explanation:

Rate = 3%

PMT = 31,000

PV = -167,933

FV = 0

Using the MS Excel Nper function

How soon the fund will be exhausted = Nper(Rate, PMT, -PV, FV)

= Nper (3%, 31,000, -167,933, 0)

= 6.0000255

= 6 years

Thus, it will take 6 years for the fund to be exhausted

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