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You are scheduled to receive annual payments of $10,700 for each of the next 23 years. Your discount rate is 8 percent. What is the difference in the present value if you receive these payments at the beginning of each year rather than at the end of each year?

 May 11, 2016
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1) The PV of your payments AT THE END OF THE YEAR is =$110,970.33

2)The PV of your payments AT THE BEGINNING OF THE YEAR  is =$119,847.96

3) The difference between the two is: $119,847.96 - $110,970.33=$8,877.63

 May 11, 2016

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