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9 ####plase use the formula##### Present value and Interest Rates/ what is the relationship between the value of an annuity and the level of interest
9 ####plase use the formula#####
Present value and Interest Rates/ what is the relationship between the value of an annuity and the level of interest rates? Suppose you just bought an eight-year annuity of $400 per year when interest rates are 10 percent per year. What happens to the value of your investment if interest rates suddenly drop to 6 percent? What if interest rates suddenly rise to 14 percent?
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