Answer:
The result is: $9,625
Explanation:
To determine this, we first need to calculate the future value of the invested amount over 10 years at an annual interest rate of 6.5%.
FV = P + (P × R × T )
where:
FV = Future value
P = Principal = $700,000
R = Interest rate in decimal = 6.5% = 0.065
T = Time = 10 years
Additionally, ( P × R × T ) represents the simple interest formula for the invested sum.
Thus, FV = 700,000 + ( 700,000 × 0.065 × 10 )
FV = 700,000 + 455,000 = $1,155,000
Next, we need to find out how much can be withdrawn every month over 10 years. First, we calculate the total number of months in 10 years:
1 year = 12 months
Therefore, 10 years = 12 × 10 = 120 months
Finally, the monthly withdrawal amount can be calculated as follows:
Monthly withdrawal = Total amount ÷ number of months
= 1,155,000 ÷ 120 = $9,625.
