[MOVED] What max amt can be withdrawn?

[missl]

Hi, can someone please check if I did this correctly... Thanks

Mr. Ng contributed $500 to an RRSP at the end of each calendar quarter for the last 20 years. The plan earned 10% compounded quarterly for the first 10 years and 12% compounded quarterly for the last 10 years. He is converting the RRSP to a Registered Retirement Income Fund (RRIF) and intends to withdraw equal amounts at the beginning of each month for 15 years. If the funds in the RRIF earn 8.25% compounded monthly, what maximum monthly amount can be withdrawn?

ANSWER

PMT 500 M 4 T 20 YEARS J1=10% J2= 12%

FV1 = 500 [1+10%/4] = 33701.27677
10%/4
FV=33701.277 (1+12%/4)^10*14 = 37700.62987

FV=FV1+FV2=109934.8385+37700.62987=147635.468

BEGINNING PV (DUE) = PMT [1-(1+I)^-n ] *(1+i)

147635.468=PMT [1-(1+8.25/12)^15*12 * (1+8.25%/12)
8.25/12

PMT 1,422.49

[stapel]

Please reply with clear definitions of the various different variables, along with whatever formulas you are supposed to be using. Kindly please also explain what you're doing. For instance, I have no idea what "PMT 500 M 4 T 20" might mean.

Thank you!

Eliz.