Morgan has $200,000 saved for retirement in an account earning 2.6% interest, compounded monthly. How much will she be able to withdraw each month if she wants to take withdrawals for 24 years? Round your answer to the nearest dollar

To determine how much Morgan can withdraw each month, we will use the formula for calculating the monthly withdrawal amount from a retirement account with a fixed interest rate:

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

Where:
- $ PMT $ is the monthly withdrawal amount,
- $ P $ is the principal amount (initial savings),
- $ r $ is the monthly interest rate (annual rate divided by 12),
- $ n $ is the number of withdrawals per year (12 for monthly),
- $ t $ is the number of years.

Given:
- $ P = 200,000 $,
- Annual interest rate = 2.6%, so monthly interest rate $ r = \frac{2.6\%}{12} = \frac{0.026}{12} $,
- $ n = 12 $,
- $ t = 24 $ years.

Let's calculate the monthly withdrawal amount.Morgan will be able to withdraw **$934** each month from her retirement account for 24 years.

Would you like more details or have any further questions? Here are some related questions to deepen your understanding:

1. How would the monthly withdrawal amount change if the interest rate increased to 3%?
2. What if Morgan wanted to withdraw for 30 years instead of 24? How would the amount change?
3. How does the compounding frequency (monthly vs. annually) affect the withdrawal amount?
4. How much would Morgan need to save if she wanted to withdraw $1,000 per month instead?
5. What is the total amount of money Morgan would withdraw over 24 years?

**Tip**: The higher the interest rate or the longer the compounding period, the more your money can grow due to compounding interest.

Morgan has $200,000 saved for retirement in an account earning 2.6% interest, compounded monthly. How much will she be able to withdraw each month if she wants to take withdrawals for 24 years? Round your answer to the nearest dollar.

Learn how to calculate the monthly withdrawal amount from a $200,000 retirement account with a 2.6% annual interest rate, compounded monthly, over 24 years. This problem involves using the annuity formula and understanding compound interest. Suitable for high school and college-level students.

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