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A retiree wishes to buy an annuity so that he receives an equal yearly payment of $65,000 for 20 years. Interest rate is 4% p.a.

  1. A retiree wishes to buy an annuity so that he receives an equal yearly payment of $65,000 for 20 years. Interest rate is 4% p.a. compounded annually. Determine the price he needs to pay for the investment (i.e., present value of the annuity) if the yearly payment occurs:
    1. at the end of each year
    2. at the beginning of each year

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