Having just won $1,000,000 after taxes in the state lottery, how much money can you withdraw at the end of each month for 20 years if the banks pays 6% interest compounded monthly.
Solve 
Step 
i = 0.06 ÷ 12 = 0.005 
k = 12, r = 0.10, Monthly means 12 times a year 

A
is present value = 1,000,000 n = 20 years 

Find the P the Payment (also called rent) 


You would withdraw $7,164.31 every months for 20 years.  
Enter 1,000,000 × 0.005 ÷ ( 1  1.005 x^{y }( 12 × 20 ) ) ^{ } [enter or =] in your calculator  
Hint: don't round until you are completely finished with your calculations. 