Tameshia deposits $5500 in her retirement account every year. If her account pays an average of 6% interest and she makes 38 deposits before she retires, how much money can she withdraw in 20 equal payments beginning one year after her last deposit?

Each equal witdrawal = $37,373.66

Explanation:

Giving the following information:

Tameshia deposits $5500 in her retirement account every year.

Her account pays an average of 6% interest and she makes 38 deposits before she retires.

First, we need to calculate the final value of the 38 deposits. We will use the following formula:

FV = {A*[ (1+i) ^n-1]}/i

A = annual deposit = 5,500

i = 0.06

n=38

FV = {5,500*[ (1.06^38) - 1]}/0.06 = $747,473.13

20 withdrawals:

747,473.13/20 = $37,373.66