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1. Consider an investment costing $20,000. This investment will generate leveled cash flows for 8 years. If the interest rate is 8 percent, what is
1. Consider an investment costing $20,000. This investment will generate leveled cash flows for 8 years. If the interest rate is 8 percent, what is the amount of each cash flow? Make sure to show your work.
2. You deposit $10,000 in a savings account paying 10 percent interest. If the inflation rate is expected to be 2.75 percent over the course of next year, at what rate will the purchasing power of your investment grow? Make sure to show your work.
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