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Initial investment will increase or decrease

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a. You need $40,750 at the end of tenth year, the available option that your bank is offering you is 10% compounded annually. How much you need to invest today so as to receive your desire amount at the end of tenure.

b. How your invested amount will change if the offered rate from the bank changes from 10% to 15%? Will the initial investment will increase or decrease? Give your response in not more than three sentences.

Reference no: EM132543941

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