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You have your choice of two investment accounts. Investment A is a 15-year annuity that features end-of-month $1,000 payments and has an interest rate of
You have your choice of two investment accounts. Investment A is a 15-year annuity that features end-of-month $1,000 payments and has an interest rate of 9.5 percent compounded monthly. Investment B is a 9 percent continuously compounded lump sum investment, also good for 15 years. How much money would you need to invest in B today for it to be worth as much as investment A 15 years from now?
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