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a.PMT = $5,000 per year; I = 8.6% per year; N = 15 years. Calculate the PV. b.Tom was injured and disabled at work. The

a.PMT = $5,000 per year; I = 8.6% per year; N = 15 years. Calculate the PV.

b.Tom was injured and disabled at work. The insurance company is currently paying him $75,000 per year. This will continue for 40 years. If the insurance company offers Tom a single amount today, in exchange for eliminating the annual payments, how much should Tom ask for (today)? Assume an interest rate of 8%.

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