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Sam's uncle promised to give him $7,000 when he graduates from college three years from now. Assuming an interest rate of 8 percent compounded annually, what is the value of Sam's gift right now?

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The time value of money is the widely accepted idea that there is greater benefit to receiving a sum of money now rather than an identical sum later.


Sam's uncle promised to give him $7,000 when he graduates from college three years from now. Assuming an interest rate of 8 percent compounded annually, what is the value of Sam's gift right now?






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