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A company estimates that it will need $180,000 in 12 years to replace a machine. If it establishes an ordinary annuity by mak

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Answer #1

Future value of annuity=Annuity[(1+rate)^time period-1]/rate

180,000=Annuity[(1.09)^12-1]/0.09

180,000=Annuity*20.1407198

Annuity=180,000/20.1407198

=$8937(Approx).

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