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Problem 1: You have just purchased an investment that generates the cash flows shown below for the next four years. You are able reinvest these cash flows at 7.02 percent, compounded annually. How much is this investment worth at the end of year four?
End of year
1. $405
2. $1,173
3. $578
4. $159
Should you give the person the money, or keep it for yourself? Is it more important to help other people who are in need, or to live one's life as fully as possible?
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