What is the annually compounded interest rate for the fund during the final 30 years?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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OPG has set up a fund to help pay the expenses for the monitoring of Pickering nuclear power plant once it is in
safe storage. The balance in the fund today is $700 million, and it will earn interest at 7% compounded annually.
Starting 10 years from now, $100 million will be withdrawn from the fund at the beginning of every year for 30
years. What is the annually compounded interest rate for the fund during the final 30 years?
Select one:
OA 0.72%
OB.0.67%
O C. 7%
D. 4.33%
E. 6.61%
page
Transcribed Image Text:OPG has set up a fund to help pay the expenses for the monitoring of Pickering nuclear power plant once it is in safe storage. The balance in the fund today is $700 million, and it will earn interest at 7% compounded annually. Starting 10 years from now, $100 million will be withdrawn from the fund at the beginning of every year for 30 years. What is the annually compounded interest rate for the fund during the final 30 years? Select one: OA 0.72% OB.0.67% O C. 7% D. 4.33% E. 6.61% page
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