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4 January, 16:51

You are the financial manager for a recreation center that has signed an option to purchase new elliptical machines for $22,500 in two years. If you have an investment opportunity that guarantees 7% interest, how much must you invest to have the necessary funds to purchase the elliptical machines?

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  1. 4 January, 16:54
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    Present Value = $19,652.37

    Explanation:

    Giving the following information:

    You are the financial manager for a recreation center that has signed an option to purchase new elliptical machines for $22,500 in two years. If you have an investment opportunity that guarantees 7% interest.

    PV = FV / (1+i) ^n

    PV = 22,500 / (1.07^2) = $19,652.37
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