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A smooth used-car salesman who smiles considerably is offering you a great deal on a preowned car. He says, For only six a

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Answer #1

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

=$2500[1-(1.08)^-6]/0.08

=$2500*4.622879664

which is equal to

=$11557.20(Approx).

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