Distribution Illustration Payouts

Example #1

A client wants to know how much money to deposit into an account that has a fixed rate of return of 4.5%. They need a monthly income of $1,200 over 25 years.

Data Entry


Prompt

Value


Calculation Type

Distributions


Calculate

Current Value


Interest Rate

4.5


Number of Years

25


Type of Distribution

Level Withdrawals


Distributions per Year

12


 

 


Distributions Made at

End of Period


Amount of Each Distribution

$1,200


Final Account Value

0

Result

The deposit (Calculated Current Account Value) will need to be $217,895.15.

Example #2

What would the account balance need to be if they wanted $1,500 per month?

Data Entry

Change the Amount of Each Deposit prompt to $1,500.

Results

The deposit would need to be $272,369.03.

Example #3

What would the account balance need to be if they wanted to increase the payment by 3% per year?

Data Entry

Change the Type of Distributions to Annual Increase by Percent and enter 3% for the Annual Increase in Distribution prompt.

Results

The deposit would need to be $371,450.01.