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Firm is saving each year (at the end) some amount of money to buy after 5 years a machine which will cost 1,000,000$. If market
Firm is saving each year (at the end) some amount of money to buy after 5 years a machine which will cost 1,000,000$. If market rate is 9% pa. under annual capitalization what amount should be saved each year in order to buy this machine (if the account offers immediate yearly capitalization)? How would your answer change if amount would be saved at the beginning of each year (if account offer due yearly capitalization)?
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