Rights to receive payments under the contract to the bank

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Reference no: EM131814669

Shippon Co. signed a contract that will entitle them to $7,000 every six months for the next eight years. They want their money now. A bank has agreed to buy the contract with a discount rate of 4%, compounded semiannually. How much will the bank be willing to pay Shippon currently if Shippon assigns its rights to receive payments under the contract to the bank?

Reference no: EM131814669

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