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Investment for Pension Liability

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A firm has an estimated pension liability of $1.5 million due 27 years from today. If the firm can invest in a risk-free security with an interest rate of 8%, how much must the firm invest today to be able to make the $1.5 million payment? (Must use Microsoft Excel)

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Solution Summary

This solution calculates the investment to be made today in order to fullfil a liability 27 years from now.

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