withdrawn annually?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
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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that an amount is withdrawn each year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withdrawn annually?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Let the to Quantity be withdrawn forever =A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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