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Effective annual discount rate

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1. How much would you need to set aside to provide each of the following (assume an effective annual discount rate of 10%)? A. $1,000,000 at the end of each year in perpetuity. B. $1,000,000 at the end of the first year and that grows at 4% a year for the next 20 years (assume that it is growing at 4% a year for 21 years). C. $1,000,000 a year spread evenly over 20 years.

Reference no: EM131670129

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