3. An investment pays as shown in the cash flow diagram below. $60,000 $40,000 $35,000 $20,000 2 8 An investor would like to turn the above incomes into an annuity paying on the same dates. The interest rate is 3% nominal annual compounded monthly for the duration of the above project. (a) Calculate the present value of the above payments. (b) Calculate the equivalent 2 year interest rate. (c) Calculate the annuity value for each of the four annuity payments.

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