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    Annuity and investment concerns: Joe wants to buy his son a car for his 21st birthday...

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    Joe wants to buy his son a car for his 21st birthday. If Joe's son is turning 16 today, and interest is 8% per annum, compounded semiannually, what would Joe's semiannual investment need to be if the car will cost $26,000 and the first payment is made 6 months from today?

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    Solution Preview

    Hello, Thank you for the opportunity to help. Annuities and present and future value calculations can be tricky. For your future reference, I have attached an Excel spreadsheet that calculates PV, FV of annuities and perpetuities. I hope you find that helpful. I have plugged in the appropriate numbers for your ...

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    You will find the answer to this puzzling assignment inside...

    $2.19

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