Jimmy Has $255,906 Accumulated in a 401K Plan

question 23

Multiple Choice

Jimmy has $255,906 accumulated in a 401K plan. The fund is earning a low, but safe, 3% a year. The withdrawals will take place at the end of each year starting a year from now. How soon will the fund be exhausted if Jimmy withdraws $30,000 each year?

• A)11 years.
• B)10 years.
• C)8.5 years.
• D)8.8 years.$255,906 $30,000 = 8.5302 For PVA of $1 factor of 8.5302 and i of 3%, n = 10

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