In planning for their retirement in Arizona, your parents deposited $8,000 at the end of each year for the last 15 years into a mutual fund. The fund earned an annual return of 4.2% APR compounded monthly. Now, at the end of the 15-year period, your parents have transferred their money into an annuity account that will earn 2.4% APR compounded monthly. They are to withdraw an equal amount at the end of every month for the next 20 years. After the 20 years of monthly withdrawals, the account balance will be depleted. How much will they be withdrawing each month?

Answer rating: 100% (QA)

To calculate the monthly withdrawal amount we can use the formula for the future value of an ordinar... View the full answer