Ralph wants to quit his job and move to Hawaii on December 25, 2015. Once there, he anticipates that he will need to make annual withdrawals of $14500 (starting on December 25, 2016) from his savings account to supplement his income and he wants the money to last 10 years (i.e. he'll make 10 withdrawals total). His plan is to make annual deposits into the savings account starting on December 25, 2000 and ending on December 25, 2015. If the savings account pays interest at 7.3% annually, how large should Ralph's deposits be in order for him to realize his goal?
First off I discount to find how much he will need in 15 years to withdraw that 14500 for 10 years
A = 14500((1-(1.073)^-10)/(.073)) A = 100 444.5089
Shouldn't the annual payments simply be
100444.5089 = PMT((1.073^15)-1)/.073
Although PMT = 3 905.70 is not giving me the correct answer
PMT((1.073)^16-1)/.073)=14500((1-v^10)/.073) PMT=3512.687