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A payment of $2,000 will be realized today with additional payments of $1,000 at the end of each of the next 5 years. Assume a nominal interest rate of 20% is appropriate and calculate the following:

A) Determine the future value of all the payments at the end of five years from now.

B) What is the future value 5 years from now of the $2,000 plus $1,000 annual payments if the 20% nominal interest rate is compounded semi-annually?

C) What semi-annual payments are equivalent to the $1,000 payments each year if the 20% interest is compounded semi-annually?

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M91707206

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