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Business, 01.12.2020 01:00 AbbypiePink4942

Melati was being informed by the bank that the present value of her 7-year annual savings today is $3,343.58. Without referring to a bank statement, she still remembers that she had deposited $200 which was also the minimum required payment to open the saving account. However, the records for the 3 end of the year equal payments after that are not recorded in her saving account’s book. The payments for the year 4, 5, 6 and 7 were $500, $500, $600 and $700 respectively. a. Draw a time line to illustrate the above discussed cash flow streams. b. Find the three missing cash flows if the discount rate is 2.5 percent.

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