Question
Your client has been given a trust fund valued at $1.16 million. He cannot access the money until he turns 65 years old, which is
Your client has been given a trust fund valued at $1.16 million. He cannot access the money until he turns 65 years old, which is in 25 years. At that time, he can withdraw $22,000 per month. If the trust fund is invested at a 4.5 percent rate, compounded monthly, how many months will it last your client once he starts to withdraw the money?
I have worked this problem and according to connect my answer is incorrect.
My values are as follows: PV= 1,160,000 X ( 1 + 0.0450)^25= 3,486,303.97
I= 4.5 / 12= 0.0375
FV= 0
PMT= -22,000
Compute for N= 240.99
I am not sure what I am doing wrong. Please explain, I will need to know how to work this problem on an upcoming test.
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