Assume that you will be opening a savings account today by depositing $125,000. The savings account will pay you 7.5% annual interest compounded quarterly, and this rate is assumed to remain in effect for all future periods. Five years from now you will withdraw R dollars. You will continue to make additional withdrawals of R dollars for a while longer – making your last withdrawal at the end of year 12 – to achieve the required pattern of withdrawals. How large must R be to leave you with exactly a zero balance after your final withdrawal is made at the end of year 12?

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