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What is the present value of the amount she will earn

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Question - Many academic institutions offer a sabbatical policy. Every seventh year a professor is given a year free of teaching and other administrative responsibilities at full pay. For a professor earning $62,500 per year who works for a total of 42 years, what is the present value of the amount she will earn while on sabbatical if the interest rate is 4% (EAR)? Note: Assume that the sabbatical annual salary is paid in one lump sum every 7 years.

Reference no: EM133125472

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