Annuity present value
What is the value of today of a 15-year annuity that pays $500 a year? The annuity's first payment occurs at the end of year 6. The annual interest rate is 12 percent for years 1 through 5, and 15 percent thereafter.
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what would happen in the very short run to output and the real interest rate? What must happen to the LM curve and the price level to restore general equilibrium? Draw and label the graphs.
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