present value

tultul_gis

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Joined
Feb 11, 2011
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Stevenson Interiors of Kingston has a $67,500 liability they must pay four years from today. The
company is opening a savings account so that the entire amount will be available when this debt needs
to be paid. The plan is to make an initial deposit today and then deposit an additional $10,000 a year for
the next four years, starting one year from today. The account pays a 5 percent rate of return. How
much does the firm need to deposit today?
 
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