John invests $45,000 today for a period of 12 years with a constant annually compounded interest...

 

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John invests $45,000 today for a period of 12 years with a constant annually compounded interest rate of 15%. At the end of the first year, John will be able to earn $6,750 in interest from this investment. He will be wondering if he will want to take some or all of this $6,750 out to pay some of his personal debts off because the $45,000 principal will still be able to earn him another $6,750 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 12 years from today (rounded to the nearest whole dollar)? John invests $45,000 today for a period of 12 years with a constant annually compounded interest rate of 15%. At the end of the first year, John will be able to earn $6,750 in interest from this investment. He will be wondering if he will want to take some or all of this $6,750 out to pay some of his personal debts off because the $45,000 principal will still be able to earn him another $6,750 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 12 years from today (rounded to the nearest whole dollar)?

Answer rating: 100% (QA)

First calculate the future value of the investment after 12 years The future value of an investment ... View the full answer