Ken has just retired. His Roth IRA has a present value of $524,856.00 and has an interest rate of 3.4%, compounded annually. In addition, he receives a yearly pension of $32,615.12. Given that Ken plans to draw from his Roth IRA for the next fifteen years, find his total annual income.

Use the present-value formula for equal annual withdrawals: payment = 524,856 × 0.034 ÷ [1 − (1.034)^−15], which is about $45,247 per year. Add Ken’s annual pension of $32,615.12: his total annual income is about $77,862.30. This matches choice b, $77,862.30.

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