To calculate how much Pilar will be able to withdraw each week for 17 years from her retirement savings of $800,000 earning 4.3% interest compounded weekly, we can use the formula for compound interest.
1. First, we need to determine the annual interest rate. Since the interest is compounded weekly, we need to divide the annual interest rate (4.3%) by the number of compounding periods in a year. With 52 weeks in a year, there are 52 compounding periods in a year.
2. Calculate the weekly interest rate by dividing the annual interest rate by 52:
Annual interest rate / 52 = Weekly interest rate
4.3% / 52 = 0.0827%
3. Next, we calculate the total amount after 17 years by using the compound interest formula:
A = P(1 + r/n)^(nt)
Where:
A = Total amount after 17 years
P = Principal amount ($800,000)
r = Annual interest rate (0.043)
n = Number of compounding periods in a year (52)
t = Number of years (17)
4. Substitute the values into the formula and calculate the total amount.
5. Once we have the total amount after 17 years, we can calculate the weekly withdrawal amount. Divide the total amount by the total number of weeks in 17 years:
Total amount / (52 weeks/year * 17 years) = Weekly withdrawal amount
6. Round the weekly withdrawal amount to the nearest dollar to find out how much Pilar can withdraw each week for 17 years.
By following these steps, you can determine the weekly withdrawal amount Pilar can take from her retirement savings.
