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You Can Invest $3,000 at the End of Each of the Next

question 19

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You can invest $3,000 at the end of each of the next 20 years into a retirement account paying 10% annual interest.Alternatively,you can enter into a retirement plan with your employer where,for every yearly (end-of-year) payment of $3,000 you make,the firm will contribute $1,500.Your employer's plan will also last for the next 20 years.The firm guarantees a return of 7% on its retirement plan.Which option is better?


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