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QUESTION
a) What is the present value of $40 earned 2-years from now if compounding was semi-annual and the interest rate is annually 3%?
a) What is the present value of $40 earned 2-years from now if compounding was semi-annual and the interest rate is annually 3%?
b) A "black box" just paid $20, which is expected to grow by 3% when the interest rate is 7% forever, what is the present value of this "black box"?
