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Case Application Questions 1. Calcufate what the $3,Ddeer—year deficit. had it been invested. would have amounted to at the end of the 15—year period.
2. Explain to Richard what compounding is and how it affected the cumulative amount received in question 1.
3. Calculate the return on the proposed $23,090 investment and indicate the factors entering into your recommendation to accept or reject it.
Indicate the expected return on the annuity and whether it should he accepted or rejected. Construct an explanation of the time value of money for the financial plan using your
answers to questions 1 through 4 in this part of the financial plan to help you
communicate the time value information to Richard and Monica. 5-“?-

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