# Your uncle has $375,000 and wants to retire. He expects to live for another 25 years and to earn...

## Question:

Your uncle has $375,000 and wants to retire. He expects to live for another 25 years and to earn 7.5% on his invested funds.

How much could he withdraw at the end of each of the next 25 years and end up with zero in the account?

## Retirement Saving:

Retirement saving is often done by making contributions to registered retirement saving accounts, such as 401(K), during the working age. Such savings generally also enjoy deferred tax liabilities.

## Answer and Explanation: 1

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View this answerThe amount he can withdraw is such that the present value of the withdrawals is exactly equal to the amount he has saved up before retirement. The...

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Chapter 8 / Lesson 3Learn how to find present value of annuity using the formula and see its derivation. Study its examples and see a difference between Ordinary Annuity and Annuity Due.

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