Value of Investments
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You need $28,974 at the end of 10 years, and your only investment outlet is an 8 percent long-term certificate of deposit (compounded annually). With the certificate of deposit, you make an initial investment at the beginning of the first year.
A. What single payment could be made at the beginning of the first year to achieve this objective?
B. What amount could you pay at the end of each year annually for 10 years to achieve this same objective?
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Solution Summary
This solution is comprised of a detailed explanation to find the initial investment and annual investment in text file.
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A. What single payment could be made at the beginning of the first year to achieve this objective?
In order to find the single payment to be made at the beginning of the first year, you need to find the present value of the initial investment by using the present value formula as ...
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