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Unformatted text preview: interest rate. – Period length has to be the same as the time between cash flows. - The present value of an annuity is the amount of money you would need today to duplicate the cash flows associated with the annuity (for a given interest rate). Typical Annuities - Most consumer loans – Car loans – Loans for appliances – Credit card loans (if you do not add to the negative balance). - Student loans - Mortgages - In all these cases, you borrow a certain amount...
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This document was uploaded on 03/17/2014 for the course COMM 298 at University of British Columbia.

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