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A bank is negotiating a loan. The loan can either be paid off as a lump sum of $110,000 at the end of 4 years,
A bank is negotiating a loan. The loan can either be paid off as a lump sum of $110,000 at the end of 4 years, or as equal annual payments at the end of each of the next 4 years.
If the interest rate on the loan is 6.1% regardless of the payment method, what annual payments should be made so that both forms of payment are equivalent?
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