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Today, you will deposit a lump sum of money into a fund that pays 12% interest, to help pay for four years of future expenses.
Today, you will deposit a lump sum of money into a fund that pays 12% interest, to help pay for four years of future expenses. Starting 10 years from now (at the end of the 10th period), you will make equal annual withdrawals, in constant dollars, for four years (periods 10 through 13). The amount you will withdraw is $75,000 per year, in constant value 2020 dollars. The inflation rate is 2.9%. Use i' with constant dollars to solve part B. Draw a cash flow diagram and show your work. a. Calculate i b. Determine how much money you must deposit into the account
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