See Problem 5-19. Now, suppose your parents have decided that they will depend on their retirement savings for 20 years. Everything else remains the same. How much money can they afford to withdraw at...

See Problem 5-19. Now, suppose your parents have decided that they will depend on their retirement savings for 20 years. Everything else remains the same. How much money can they afford to withdraw at the beginning of each month?

Problem 5-19

Suppose your parents have just retired and have $1 million in a retirement account. For how many years can they withdraw $5,000 at the beginning of each month for expenses, assuming that the account will continue to earn a 5 percent annual return until it is exhausted?

A. Solve using a spreadsheet program such as Excel. Indicate the spreadsheet formula showing numeric values rather than cell references. For example, for the value that $100 today could grow to in 2 years, assuming 10 percent annual compounding, the spreadsheet solution formula would be = FV(10%, 2, 0, 100). Note that since there is no annuity payment (PMT) in this problem, it is necessary to show the blank between two commas or a zero after the number of periods. In addition, answer the questions using formulas with cell references.

B. Solve using a financial calculator. (optional)