Uniform series of payments, Macroeconomics

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Your project has an estimated cost for land reclamation to be realized at the end of 20 years from today for $70,000,000. If current bond long-term interest rates are 7% compounded annually, what would you need to invest in zero-coupon bonds today to cover the estimated cost after 20 years. (We will learn about zero-coupon bonds later. For now, just calculate the present value (P) at time zero for a future value (F) of $70,0000,000 20 years from today at an interest rate of 7% compounded annually.)

What uniform series of payments (A) at the end of periods 1 through 20 would also cover the year 20 cost? (Use 7% interest.)


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