John Has Just Been Employed by a Prestigious Firm,drawing an Annual

question 9

Multiple Choice

John has just been employed by a prestigious firm,drawing an annual salary of $300 000,paid at the end of each year.He plans to work for five years before retiring.He buys a new luxury home with mortgage repayments of $5000 per month for the next 20 years (payable at the end of each month) ,and donates $10 000 per annum forever to his favourite charity.What annual amount,in present value terms,can John withdraw for the first five years of his retirement from the remainder of his savings? Assume an annual interest rate of 6% p.a.

• A)$93 926
• B)$246 819
• C)$94 754
• D)$112 754

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Definitions:

Hypothesis

An “if-then” statement that follows logically from a theory and specifies how certain variables should be related to each other if the theory is correct.

Stereotype Threat

A situational predicament in which individuals are at risk of confirming negative stereotypes about their social group.

Task Performance

The execution and completion level of duties or jobs by an individual or team.

Negatively Stereotyped

Being viewed or categorized in an oversimplified and unfavorable way based on group membership.