You have $300,000 saved for retirement. Your account earns 5% interest. How much will you be able to pull out each month, if you want to be able to take withdrawals for 25 years?

To calculate the monthly withdrawal amount you can take from your retirement savings of $300,000 over 25 years, with an interest rate of 5%, we use the formula for the **monthly annuity withdrawal**:

\[
PMT = \frac{P \times r}{1 - (1 + r)^{-n}}
\]

where:
- $ P $ = initial principal (savings amount) = $300,000
- $ r $ = monthly interest rate = annual interest rate / 12 = 5% / 12 = 0.0041667
- $ n $ = total number of withdrawals = 25 years $\times$ 12 months/year = 300 months

Plugging in the values:

\[
PMT = \frac{300,000 \times 0.0041667}{1 - (1 + 0.0041667)^{-300}}
\]

Let's calculate this step-by-step.You will be able to withdraw approximately $1,753.77 each month for 25 years from your retirement savings of $300,000, given an annual interest rate of 5%.

Would you like more details or have any questions about this calculation?

Here are 5 related questions you might find interesting:
1. How would the monthly withdrawal amount change if the interest rate were higher, say 6%?
2. What would happen to the withdrawal amount if you wanted to withdraw for 30 years instead of 25?
3. How much would need to be saved initially to get a monthly withdrawal of $2,000 for 25 years at 5% interest?
4. What if withdrawals are made annually instead of monthly? How would that change the amount?
5. How would the monthly withdrawal change if you added an extra $50,000 to the savings?

**Tip:** When planning for retirement, consider inflation and taxes, as they can affect the real value of your withdrawals.

Learn how to calculate monthly retirement withdrawals from a $300,000 account with 5% annual interest over 25 years. This problem covers key financial mathematics concepts, such as annuities, interest rates, and time value of money, and uses the annuity formula to find a monthly withdrawal amount of approximately $1,753.77.

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