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October 1, 2014

October 1, 2014

Posted by **London** on Friday, October 23, 2009 at 6:22pm.

- finance -
**Reiny**, Friday, October 23, 2009 at 9:25pmThe assumption that the first payment is made 4 years from now should have been an essential part of the question, not an afterthought in brackets.

So three years from now there has to be sufficient money in the fund to provide interest of 2500 in one year.

P=I/(rt) = 2500/.0825 = $30,303.03

how much is that worth now ?

Present Value = 30303.03(1.0825)^-3

= $23,889.24

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