Kim is determining her retirement plan. Consider she has $500,000 when she retires in an account that earns at an effective annual rate of 9 percent.
a If Kim withdraws $75,000 yearly, how long will her funds last?
b To make funds last 25 years, evaluate how much can Kim withdraw yearly?
c Kim is considering a two phase withdrawal where she withdraws $60,000 yearly for 10 years, and then $35,000 thereafter when social security starts. How long will her funds last consider that the 9% rate of return (EAR) is accurate for both phases of the retirement plan.