You have just won the lottery and will receive a lump sum payment of $22.93 million after taxes. Instead of immediately spending your money, you plan to deposit all of the money into an account that will earn 5.11 percent. If you make equal annual withdrawals for the next 35 years, how much can you withdraw each year starting exactly one year from now

The amount you can withdraw each year is $1,419,926

Explanation:

In order to calculate the amount you can withdraw each year starting exactly one year from now we would have to make the following calculation:

amount you can withdraw each year=r*PV/1 - (1+r) ∧-n

According to the given we have the following:

PV=$22,930,000

r=5.11%

n=35

Therefore, amount you can withdraw each year=5.11%*$22,930,000/1 - (1+5.11%) ∧-35

amount you can withdraw each year=$1,171,723/0.8252

amount you can withdraw each year=$1,419,926

The amount you can withdraw each year is $1,419,926