Your investor promises you an investment opportunity that will yield a rate of return of 12⁹ per year. He asks you to invest $10,000 now, and pay $7000 per year for 3 years starting years from now. Determine the equivalent amount of money that you can withdraw ever year forever starting 5 years from now?

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
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Your investor promises you an investment opportunity that will yield a rate of return of 12%
per year. He asks you to invest $10,000 now, and pay $7000 per year for 3 years starting 2
years from now. Determine the equivalent amount of money that you can withdraw every
year forever starting 5 years from now?
Transcribed Image Text:Your investor promises you an investment opportunity that will yield a rate of return of 12% per year. He asks you to invest $10,000 now, and pay $7000 per year for 3 years starting 2 years from now. Determine the equivalent amount of money that you can withdraw every year forever starting 5 years from now?
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