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In three years you will pay the first of eight annual $100 payments. The current interest rate is 14%, but after 5 years (by t=5)
In three years you will pay the first of eight annual $100 payments. The current interest rate is 14%, but after 5 years (by t=5) the rate will have dropped to 8%. What is the total value of your payments at the end of 10 years?
I know the answer is $1092, however, I am struggling in how to split my interest rates. If anyone can give me the steps that would be greatly appreciated.
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