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    Present Value of a Lump Sum

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    Find the present value of a 3-year, $20,000 ordinary annuity deposited into an account that pays 12 percent interest, compounded monthly. Solve for the present value of the annuity in the following ways:

    a. As three single cash flows discounted at the stated rate of interest
    b. As three single cash flows discounted at the appropriate effective rate of interest
    c. As a 3-year annuity discounted at the effective rate of interest

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