Your uncle has $375,000 and wants to retire.

31. Your uncle has $375,000 and wants to retire. He expects to live for another 25 years and to earn 7.5% on his invested funds. How much could he withdraw at the end of each of the next 25 years and end up with zero in the account?

a. $28,843.38

b. $30,361.46

c. $31,959.43

d. $33,641.50

e. $35,323.58

32. Your uncle has $375,000 and wants to retire. He expects to live for another 25 years, and he also expects to earn 7.5% on his invested funds. How much could he withdraw at the beginning of each of the next 25 years and end up with zero in the account?

a. $28,243.21

b. $29,729.70

c. $31,294.42

d. $32,859.14

e. $34,502.10:

33. Your grandmother just died and left you $100,000 in a trust fund that pays 6.5% interest. You must spend the money on your college education, and you must withdraw the money in 4 equal installments, beginning immediately. How much could you withdraw today and at thebeginning of each of the next 3 years and end up with zero in the account?

a. $24,736

b. $26,038

c. $27,409

d. $28,779

e. $30,218

34. Suppose you inherited $275,000 and invested it at 8.25% per year. How much could you withdraw at the beginning of each of the next 20 years?

a. $22,598.63

b. $23,788.03

c. $25,040.03

d. $26,357.92

e. $27,675.82

35. Your father’s employer was just acquired, and he was given a severance payment of $375,000, which he invested at a 7.5% annual rate. He now plans to retire, and he wants to withdraw $35,000 at the end of each year, starting at the end of this year. How many years will it take to exhaust his funds, i.e., run the account down to zero?

a. 22.50

b. 23.63

c. 24.81

d. 26.05

e. 27.35

36. Your uncle has $300,000 invested at 7.5%, and he now wants to retire. He wants to withdraw $35,000 at the end of each year, starting at the end of this year. He also wants to have $25,000 left to give you when he ceases to withdraw funds from the account. For how many years can he make the $35,000 withdrawals and still have $25,000 left in the end?

a. 14.21

b. 14.96

c. 15.71

d. 16.49

e. 17.32

37. Your Aunt Ruth has $500,000 invested at 6.5%, and she plans to retire. She wants to withdraw $40,000 at the beginning of each year, starting immediately. How many years will it take to exhaust her funds, i.e., run the account down to zero?

a. 18.62

b. 19.60

c. 20.63

d. 21.71

e. 22.86

38. Your aunt has $500,000 invested at 5.5%, and she now wants to retire. She wants to withdraw $45,000 at the beginning of each year, beginning immediately. She also wants to have $50,000 left to give you when she ceases to withdraw funds from the account. For how many years can she make the $45,000 withdrawals and still have $50,000 left in the end?

a. 15.54

b. 16.36

c. 17.22

d. 18.08

e. 18.99

39. Suppose you just won the state lottery, and you have a choice between receiving $2,550,000 today or a 20-year annuity of $250,000, with the first payment coming one year from today. What rate of return is built into the annuity? Disregard taxes.

a. 7.12%

b. 7.49%

c. 7.87%

d. 8.26%

e. 8.67%

40. Your girlfriend just won the Florida lottery. She has the choice of $15,000,000 today or a 20-year annuity of $1,050,000, with the first payment coming one year from today. What rate of return is built into the annuity?

a. 3.44%

b. 3.79%

c. 4.17%

d. 4.58%

e. 5.04%