Grandpa Smith Has $200,000 in a Bank Account, Which Pays

question 246

Multiple Choice

Grandpa Smith has $200,000 in a bank account, which pays him interest at 4%. What is the largest amount of money that he could take out now and still leave enough in the account so that he can earn $500 per month in interest?

• A) $60,000
• B) $50,000
• C) $120,000
• D) $150,000
• E) $30,000

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Definitions:

Adjustments

Entries made in accounting to record expenses or revenues in the period they occur rather than when cash is paid or received, ensuring accuracy in financial statements.