Question #149176

Mr. Rahul has been saving Rs.9,500 at the beginning of every quarter for 25 years at an

average return of 14% p.a. compounded quarterly. He has to set apart Rs.15,00,000 for

his daughterâ€™s marriage and Rs.10,00,000 for his sonâ€™s marriage from accumulated sum

after 25 years. He is saving separately for their education and he wishes to withdraw a

certain amount for the next 25 years on the remaining sum. The money accumulated will

be invested at a rate of 8% p.a. How much can he withdraw at the beginning of every

year?

average return of 14% p.a. compounded quarterly. He has to set apart Rs.15,00,000 for

his daughterâ€™s marriage and Rs.10,00,000 for his sonâ€™s marriage from accumulated sum

after 25 years. He is saving separately for their education and he wishes to withdraw a

certain amount for the next 25 years on the remaining sum. The money accumulated will

be invested at a rate of 8% p.a. How much can he withdraw at the beginning of every

year?

Expert's answer

Sum of saving after 25 years:

"9.500*\\frac{(1+\\frac{0.14}{4})*((1+\\frac{0.14}{4})^{25*4}-1)}{(1+\\frac{0.14}{4})-1}=8,481,629.11"

He needs:

"15,000,000+10,000,000-8,481,629.11=16,518,370.89"

He needs to withdraw ever year:

"16,518,370.89=P*\\frac{1.08*(1.08^{25}-1)}{0.08}"

"P=209,214.02"

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