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Your friend offers to pay you an annuity of $ 2 , 5 0 0 at the end of each year for 3 years in

Your friend offers to pay you an annuity of $

2, 500

at the end of each year for

3

years in return for cash today. You could earn

5.5 %

on your money in other

investments with equal risk. What is the most you should pay for the annuity?

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