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The bond consists of a 5-year, 8% annuity of $40/year plus a $500 lump sum at t=5. 1.What is present value of annuity? (4 points)

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The bond consists of a 5-year, 8% annuity of $40/year plus a $500 lump sum at t=5. 1.What is present value of annuity? (4 points) 2. Find present value of maturity. (4 points) 3. What is value of bond? (2 points)

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