You inherit $300,000 from your parents and want to use the money to supplement your retirement.You receive the money on your 65^th birthday,the day you retire.You want to withdraw equal amounts at the end of each of the next 20 years.What constant amount can you withdraw each year and have nothing remaining at the end of 20 years if you are earning 7% interest per year? A) $15,000 B) $28,318 C) $33,574 D) $39,113

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The correct answer is B. $28,318.To calculate the constant amount that can be withdrawn each year, we can use the formula for the present value of an annuity:PV = PMT * [1 - (1 + r)^-n] / rwhere:PV is the present value of the annuity (in this case, $300,000)PMT is the constant amount withdrawn each yearr is the annual interest rate (7%)n is the number of years (20)Plugging in the values, we get:$300,000 = PMT * [1 - (1 + 0.07)^-20] / 0.07Solving for PMT, we get:PMT = $28,318.46Therefore, the constant amount that can be withdrawn each year is $28,318.

You Inherit $300,000 from Your Parents and Want to Use