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Math Help - Rrif

  1. #1
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    Rrif

    If the funds in the RRIF earn 8.25% compounded monthly, what maximum monthly amount can be withdrawn?
    PV = 147,635.48, I want to withdraw at the beginning of every month for 15 yrs.



    I figured it out that i can withdraw $11,251.67 at the beginning of each year for 15 yrs.


    Is this correct?


    thanks,
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  2. #2
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    You're asked for MONTHLY, not annual...
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  3. #3
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    Quote Originally Posted by Wilmer View Post
    You're asked for MONTHLY, not annual...


    I figured it out that i can withdraw $11,251.67 at the beginning of each month for 15 yrs.

    Ooops...is this better? the PMT seems awefully large!
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  4. #4
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    Quote Originally Posted by petedam View Post
    I figured it out that i can withdraw $11,251.67 at the beginning of each month for 15 yrs.
    Ooops...is this better? the PMT seems awefully large!
    11,251.67 * 180 months = 2,025,300.60; c'mon Pete, you should realise that's impossible...

    11251.67 is the amount of interest earned on opening amount less one payment of 11251.67,
    for one YEAR at 8.25% compounded annually (not monthly):
    (147,635.48 - 11251.67) * .0825 = 11251.67

    Soooooo: what the heck are you doing?!

    At 8.25% compounded monthly with 1st payment right away, the MONTHLY payment is 1422.49
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  5. #5
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    I knew it was wrong. Sorry i just had a brain freeze and couldn't see .....thanks!
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