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question 1 In two years, a bond will start paying out an annual annuity of 20:-, after which the annuity will increase by 2% per

question 1

In two years, a bond will start paying out an annual annuity of 20:-, after which the annuity will increase by 2% per year. The bond will pay out an annuity for 30 years. No face value has been paid in the last year. What does the bond cost today? Use a return requirement of 7%. Ignore taxes.

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