Periodic Withdrawals
With the withdrawals calculation you can find out for how long you can continue to make periodic withdrawals from an account until it is depleted.
At the end of each period FinKit calculates the remaining balance: if it is less than the periodic withdrawal then this will be the amount of the final withdrawal.
If the maximum number of periods for the given payment frequency is reached and:
| • | the balance is greater
than the initial balance, an infinity symbol (" ")
will be displayed for the results, to indicate that withdrawals can continue
indefinitely |
| • | the balance decreases but is still greater than zero, a question mark ("?") will be displayed for the results, indicating that withdrawals will stop eventually |
To see the amortization schedule, select the Show Details command in the Calculation menu.
To toggle between date and year/period view, click the header of the first details column.
To change the start date, select the Start Date command in the Edit menu to open the Date Options dialog.
Input
| • nominal annual rate | |
| • compounding frequency | |
| • withdrawal frequency | |
| • current balance | |
| • periodic withdrawal | |
| • periodic change: | |
| •
no change • percentage (positive or negative) • amount |
|
Results
| • number of withdrawals before the balance reaches zero |
| • effective periodic rate |
| • total paid |
| • total interest |
Example
| • | From an account with a current balance of $100,000 you want to make monthly withdrawals of $1,000. How many withdrawals can you make if interest is at 5 % compounded quarterly?
Answer: you can make 130 witdrawals, the last one being $453.76 as you can see in the details. |
Related topics
| Fractional Withdrawals |
| Nominal annual rate |
| Compound interest |