A company collects $1,500 of rent from a tenant at the end of the year....
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A company collects $1,500 of rent from a tenant at the end of the year. The company invests the rent money in an investment earning 4% interest peryear. Assuming a 4% annual interest rate is appropriate, the implied annual interest is $1,500 0.04 = $60, and the present value of the rent is $1,500 0.96154 = $1,442. What is the discounted value of this rent at the beginning of Year 1?
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