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withdrawn annually?

withdrawn annually?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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A government company decided to open an account for strategic purposes (to help face non-exceptional circumstances to which the company may be exposed), and an amount of (100) million dinars has been deposited in it. Provided that an amount is withdrawn each year Fixed annual basis and for an infinite number of years. If the prevailing interest is (100) how much is the amount withdrawn annually?
Transcribed Image Text:A government company decided to open an account for strategic purposes (to help face non-exceptional circumstances to which the company may be exposed), and an amount of (100) million dinars has been deposited in it. Provided that an amount is withdrawn each year Fixed annual basis and for an infinite number of years. If the prevailing interest is (100) how much is the amount withdrawn annually?
Expert Solution
Step 1

following are the calculation of the given question;

Amount deposited today (X) = 100 million dinar

 Interest rate= r = 10%

 Let the to Quantity be withdrawn forever =A

Quantity of accumulation today is the present value of perpetuity.

 

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