Question: Suppose you are going to receive $ 2 0 , 0 0 0 per year for five years. The appropriate interest rate is 7 percent.

Suppose you are going to receive $

20, 000

per year for five years. The appropriate interest rate is

7

percent. a

.

What is the present value of the payments if they are in the form of an ordinary annuity? What is the present value if the payments are an annuity due?

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