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Please help Ina owns an ANNUITY DUE contract that will pay her $3,000 per year for 12 years. Ina needs money to pay back a
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Ina owns an ANNUITY DUE contract that will pay her $3,000 per year for 12 years. Ina needs money to pay back a loan in 5 years. But she is afraid that, if she gets the promised payments annually, she will spend the money and not be able to pay back her loan. Ina decides to sell her annuity for a lump sum of cash to be paid to her 5 years from today. If the interest rate is 8%, what is the equivalent value of this 12-year annuity, if paid in one lump sum 5 years from today? Round your answer to the nearest dollar Select one: a. $18,000 b. $35.876 c. $22.008 d. $38,880Step by Step Solution
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