4 ms·
It is not. As I mentioned in the post, you need to set aside the money for the year's expenses at the beginning of the year. $1mil provides $90.9k/year because
by nileshtrivedi 14y ago
It is not. As I mentioned in the post, you need to set aside the money for the year's expenses at the beginning of the year. $1mil provides $90.9k/year because (1m - 90.9k)*0.1 = 90.9k.
Interest is received at the end of the period but we need cash in hand throughout the year to pay for the expenses.
- gibybo 14y agoAlright, so I spent another hour playing with these numbers and I think I understand it correctly now and agree with your original math. A combination of mistakes (F/I vs f/i, taking money out at the start of the year) and my imperfect intuition of inflation led me astray. Thanks for teaching me something new, and for your patience :)
- nileshtrivedi 14y agoThank you for helping me find weak points in the post and clarify it. :)