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An Agreement Stipulates Payments of $4,500, $3,000, and $5,500 in 4

Question 78

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An agreement stipulates payments of $4,500, $3,000, and $5,500 in 4, 8, and 12 months, respectively, from today. What is the highest price an investor will offer today to purchase the agreement if he requires a minimum rate of return of 5.5%?

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