Question
Jack has just received an inheritance from his late uncle. It provides for an immediate inheritance of $250,000 plus an income of $20,000 per year
Jack has just received an inheritance from his late uncle. It provides for an immediate inheritance of $250,000 plus an income of $20,000 per year for 20 years with the first $20,000 received one year from today. All the funds (the immediate inheritance plus annual payments) will go directly into a savings account that will pay interest of 10% per year compounded annually for as long as there is money in the account. Jack believes the inheritance should set him up for life so he has quit his job and is relying solely on the proceeds from the inheritance. If Jack spends $30,000 per year (and he withdraws all his spending money at one time at the end of each year starting one year from now), how many years will the inheritance last?
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