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6 The past year has been very profitable for Natasha's business. She wishes to set up a fund that will provide extra income. Her requirements
6 The past year has been very profitable for Natasha's business. She wishes to set up a fund that will provide extra income. Her requirements for this fund are: - This fund should provide annual payments indefinitely. - The first three payments from this fund are to be $5,000 each, the first to be paid exactly one year from today. - After the first three payments, Natasha wants the payments to increase to keep pace with inflation. She believes that the rate of inflation will be 2% p.a. effective, starting 3 years from now. - Natasha has access to an investment account that earns 5% p.a. effective, and promises to do so indefinitely. Suppose that 3 years have passed, and the account has just made the third payment of $5,000. The next payment is exactly 1 year from now, and will be indexed for inflation. It will be $5,100 (5000 x (1.02)) How much money should be in the account at this point in time (immediately after the third payment from the account) in order to be able to afford the future payments? Round your answer to the nearest whole number
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