Math Problem Statement
You want to be able to withdraw $45,000 each year for 30 years. Your account earns 4% interest.
a) How much do you need in your account at the beginning?
$
b) How much total money will you pull out of the account?
$
c) How much of that money is interest?
$
Solution
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Math Problem Analysis
Mathematical Concepts
Annuities
Present Value
Interest Calculation
Formulas
Present Value of Annuity Formula: PV = P × [(1 - (1 + r)^-n) / r]
Total Withdrawals = P × n
Interest = Total Withdrawals - Initial Amount
Theorems
Annuity Theorem
Time Value of Money
Suitable Grade Level
Grades 11-12 and College-Level Finance
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