Answer:
If he withdraws $43,645 at the beginning of each year over the next 25 years, he will be left with zero in the account
Explanation:
First, let us calculate the total worth of the investment after 25 years, and it is calculated as:
Amount invested + Amount earned due to interest.
The interest is 7.5% of the invested amount = [tex]\frac{7.5}{100}[/tex] × [tex]\frac{1,015000}{1} = 76,125[/tex]
Therefore, after 25 years he will earn $76,125 on the original investment.
Hence,
Total worth of investment after 25 years = $76,125 + $1,015000 = $1,091,125.
Finally for there to be a zero balance in his account over the next 25 years, the total worth of the investment is equally spread over the next 25 years as:
$1,091,125 ÷ 25 = $43,645.
