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6. Now consider the following schedule of payments: End of Year Payment 0 2,000 1 2,000 2 0 3 1500 4 2500 5 4,000 a.
6. Now consider the following schedule of payments:
End of Year Payment
0 2,000
1 2,000
2 0
3 1500
4 2500
5 4,000
a. What is the value of this payment stream at the end of Year 5 if the payments are invested at 10.0 percent annually?
b. What payment today (Year 0) would be needed to accumulate the needed $20,000? (Assume that the payments for Years 1 through 5 remain the same.)
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