Asked by Maura Donahue on Apr 23, 2024
How long will $500,000, in an investment account that earns 5.25% compounded monthly, sustain month-end withdrawals of $3,000?
Compounded Monthly
Interest that is calculated on the principal and the previously earned interest on a monthly basis, leading to the accumulation of increasingly larger amounts.
Month-end Withdrawals
Financial transactions to remove money from an account or investment at the end of the month, often for budgeting or payment purposes.
Investment Account
A financial account that is used for holding and transacting securities or other investment instruments.
- Gauge the span of conventional annuities by looking at installment sizes, rate of interest, and principal investments.
Learning Objectives
- Gauge the span of conventional annuities by looking at installment sizes, rate of interest, and principal investments.