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An employee's compensation includes an annuity that pays $ 8 0 , 0 0 0 at retirement, with each subsequent annual payment growing by 3

An employee's compensation includes an annuity that pays $

80, 000

at retirement, with each subsequent annual payment growing by

3 %

for a total of

9

payments overall. The firm's policy is to pre

-

fund such annuities before retirement. At an interest rate of

5 %,

how much would the firm need to invest

2

years before retirement?

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