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You have a chance to buy an annuity that pays $ 2 , 0 0 0 at the end of each year for 5 years.

You have a chance to buy an annuity that pays $

2, 000

at the end of each year for

5

years. You could earn

7 %

on your money in other investments with equal risk. What is the most you should pay for the annuity?

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