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I'm not sure where you're getting this info from, but that hasn't necessarily been my experience.  Yes, there are 100 watt rigs that won't produce 100 watt PEP - if I remember correctly, the 746 Pro I owned was like that.  However, there are plenty of rigs that do produce full output on AM.  For AM, the general rule of thumb is that the carrier should be set to 1/4 the rig's PEP for proper modulation.


Anyway, back to the original question, for $500 I'd probably look for a used rig - see if you can find a deal on an Icom 706mkiig