Question 3 • Financial Algebra/Mathematics
For equal annual withdrawals that reduce the account to zero, use the annuity payment formula: payment = 28,000 × r ÷ [1 − (1 + r)⁻ⁿ]. The 4-year plan at 5.8% gives annual withdrawals of about $8,043.59, or $32,174.36 in total. The 3-year plan at 7.083% gives about $10,685.63 per year, or $32,056.89 total. The 4-year account therefore yields the higher total return: $32,174.36.
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