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11 Taylor Jean just retired today. He is going to take out a withdrawal of $85,000 today to fund his worldwide travels for 2 years.
11 Taylor Jean just retired today. He is going to take out a withdrawal of $85,000 today to fund his worldwide travels for 2 years. Then he will make 25 annual unequal withdrawals from his savings with the first withdrawal occurring at 1-2. He wants each withdrawal to have the same purchasing power as $60,000 has today so the withdrawals need to grow at a constant rate of 2% to compensate for expected inflation per year. His savings account earns 8% per year. How much needs to be in his savings account today in order for him to be able to withdraw $85,000 today and make 25 additional withdrawals (from t-2 through t-26)? Round all calculations to the nearest dollar. 0 1 2 3 26 27 28 + + + 1 -85K 0+ W W2 W25 PV
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