ohn invests $50,000 today for a period of 15 years with a constant annually compounded intere 12%. At the end of the first year, John will be able to earn $6,000 in interest from this investmen be wondering if he will want to take some or all of this $6,000 out to pay some of his personal d because the $50,000 principal will still be able to earn him another $6,000 interest the year after What is the most that John can spend in equal amount out of the investment each year during th investment period of 15 years from today (rounded to the nearest whole number)?
ohn invests $50,000 today for a period of 15 years with a constant annually compounded intere 12%. At the end of the first year, John will be able to earn $6,000 in interest from this investmen be wondering if he will want to take some or all of this $6,000 out to pay some of his personal d because the $50,000 principal will still be able to earn him another $6,000 interest the year after What is the most that John can spend in equal amount out of the investment each year during th investment period of 15 years from today (rounded to the nearest whole number)?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:ohn invests $50,000 today for a period of 15 years with a constant annually compounded interest rate of
12%. At the end of the first year, John will be able to earn $6,000 in interest from this investment. He will
be wondering if he will want to take some or all of this $6,000 out to pay some of his personal debts off
because the $50,000 principal will still be able to earn him another $6,000 interest the year after.
What is the most that John can spend in equal amount out of the investment each year during the
investment period of 15 years from today (rounded to the nearest whole number)?
O a. 9,224
O b. 6,000
O c. 7,538
O d. 8,072
Oe. None of the other answers are correct
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