Andrew has saved $550,000 in his retirement account, which earns an annual interest rate of 4% He plans to withdraw from the account each month for 20 years. Approximately how much is his monthly payout? Use the formula P=P⁢V⋅(r)/(1−(1+r)^−n)

Convert the annual rate to a monthly rate: 0.04 ÷ 12 ≈ 0.003333, and use 20 × 12 = 240 monthly withdrawals. Substituting into the formula gives P = 550,000(0.003333) ÷ [1 − (1.003333)^−240] ≈ $3,332.89. Therefore, the monthly payout is approximately $3,332.89, choice C.

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