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c. Calculate the present value of receiving $1,800 per year, with certainty, for the next 20 years. Infer rates for the missing years using linear

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c. Calculate the present value of receiving $1,800 per year, with certainty, for the next 20 years. Infer rates for the missing years using linear interpolation. (Hint: Use a spreadsheet.)

Suppose the term structure of risk-free interest rates is as shown below: 1 yr Term Rate (EAR %) 2.08 2 yr 2.47 3 yr 2.65 5 yr 3.26 7 yr 3.74 10 yr 4.25 20 yr 4.98

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