Find the equivalent discount rate

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Question: Many academic institutions offer a sabbatical policy. Every seventh year a professor is given a year free of teaching and other administrative responsibilities at full pay. For a professor earning $100,000 per year who works for a total of 42? years,

A) The equivalent discount rate is

B)what is the present value of the amount she will earn while on sabbatical if the interest rate is 10% (EAR)? Note: Assume that the sabbatical annual salary is paid in one lump sum every 7 years.

Reference no: EM131982349

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