Answer:
$2,639.91
Explanation:
In this case, you expect to make 240 monthly withdrawals. Calculating this is similar to calculating the payments for paying a credit.
- principal = $400,000
- interest rate = 0.05/12 = 0.004167
- n = 240
payment = principal x rate x [(1 + r)ⁿ] / [(1 + r)ⁿ - 1]
payment = $400,000 x 0.004167 x [(1 + 0.004167)²⁴⁰] / [(1 + 0.004167)²⁴⁰ - 1] = $400,000 x 0.004167 x (2.712864 / 1.712864) = $2,639.91
