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#2. How much money will you need to deposit into an account today that pays 10% APR compounded annually in order to have $2,500 in

  1. #2. How much money will you need to deposit into an account today that pays 10% APR compounded annually in order to have $2,500 in the account six years from now?
    1. Based on the question above, does the cash flow of $2,500 represent a future value or a present value? How do you know?

  1. To solve this problem, you will need to calculate which of the TVM components?

  1. Would the initial cash flow in this problem be a cash inflow or a cash outflow?

  1. Will the answer to this problem be greater than or less than $2500? How do you know?

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