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a. The present value of the $1,000 would be greater if interest were compounded monthly rather than quarterly. b. The periodic interest rate is greater than 2.5%. c. Compared with this $1,000 lump sum that is due at the end of year 5, a 5-year, $200 ordinary annuity has a higher present value. d. The periodic interest rate is less than 2.5%. 15 ... ................
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