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QUESTION
Assume interest rates are 8%. You wish to buy a car making three installments: - $8,000 today, - $4,000 one year later, 4,000 two years later.
Assume interest rates are 8%.
You wish to buy a car making three installments:
- $8,000 today,
- $4,000 one year later,
4,000 two years later.
How much money would you have to place in an account today to generate this stream of cash flows and Why?
Please, describe each step more in details
