Solved: Interest rate and the duration of the contract, Microeconomics

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Interest rate and the duration of the contract

Question:

What is the present value of a contract that promises to make year end payments to you of $100 for the next 20 years if the interest rate is 5%? The level payments (PMT) are $100 and we know the interest rate and the duration of the contract.

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Microeconomics: Interest rate and the duration of the contract

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Microeconomics: Interest rate and the duration of the contract

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