Determine the present value of this cash flow stream

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Consider a lottery that pays to the winner an annuity of $650 that begins at the end of the first year and continues at the end of each consecutive year for a total of 7 years with one exception. Because of high administrative costs associated with running the lottery, the payment in year 5, and only in that specific year, is not $650 but $0. Using an interest rate of 4.25%, determine the present value of this cash flow stream.

Reference no: EM131300861

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