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Personal Finance Problem P 5 - 2 6 Value of a retirement annuity Your bank manager has informed you about a new investment plan that

Personal Finance Problem

5 - 26

Value of a retirement annuity Your bank manager has informed you about a new investment plan that will provide you with $

5, 000

at the end of each of the next

20

years. If you have an opportunity to earn a guaranteed return of

6 %,

what is the most you would pay for this annuity right now?

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