I need a little help with question 2 as I am not sure of my answer.

Im not sure if i need to use 3% or 10% for the rate. You can also see question number 1 for reference.

Questions 1. Liz is retiring from the Mccormick and will turn 70 next year. After 39 years of service, her monthly pension is $7,500. She does not qualify for Social Security. Liz has accumulated $700,000 in her thrift savings plan. The government requires that she convert it to an annuity or move it to a IRA. All of the money is pretax and tax can be avoided if it is moved to the IRA. The amount received form the annuity and the amount received from the IRA will be taxable when received. The annuity is a life annuity and Liz will receive the same amount each month for the rest of her life. When she dies, the annuity ends. When Liz dies, the balance in the IRA, if any, will go to someone that she designates. The annuity will be calculated based on her life expectancy of 17.5 years after age 70. The current US Treasury long-term bond rate is 3 percent. How much will she get as an annuity monthly payment? Convert the 3% per year rate to a monthly rate and use the PMT function to calculate the monthly payment to Liz. 2. Liz is required to take out approximately 3.7% of the balance in the IRA in the first year and the percent increases each year. The IRA will essentially be all used by age 100. She may take out more than the minimum each year if she chooses. If Liz expects the IRA to earn 10% each year, will her IRA balance grow in the first 4 months years if she takes out an amount equal to the annuity payment? Calculate the earnings on an annual basis and use the total of 12 months of the annuity for the amount she will take out