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6. Assume you have an option to purchase an investment that will provide a cash payment of $20,000 in 10 years. If you believe the
6. Assume you have an option to purchase an investment that will provide a cash payment of $20,000 in 10 years. If you believe the appropriate rate of return is 12% compounded semiannually, how much should you pay for this today?
7. You plan on making monthly payments of $50 to pay off a credit card that you just charged $1,000 to. If the interest rate is 24% compounded monthly, how many months will it take you to pay off the credit card balance? NOTE: State your answer in number of months.
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