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ou have deposited $12,710 in a special account that has a guaranteed rate of return. If you withdraw $3,100 at the end o...

ou have deposited $12,710 in a special account that has a guaranteed rate of return. If you withdraw $3,100 at the end of each year for 5 years, you will completely exhaust the balance in the account. The guaranteed rate of return is closest to: (Ignore income taxes.) Click here to view Exhibit 13B-1 and Exhibit 13B-2, to determine the appropriate discount factor(s) using the tables provided.

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Answer #1

Cumulative present value factor = $12710/3100

= 4.1000

Rate of return = 7%

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