Imagine that you have won the lottery. You get to choose between a prize of $100,000 today

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Imagine that you have won the lottery. You get to choose between a prize of $100,000 today and a total of $200,000 paid in 10 annual payments of $20,000 (paid at the end of each year).Which prize would you choose if the interest rate is 5%? Would your answer change if the interest rate is 20%?
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Macroeconomics

ISBN: 9780132109994

1st Edition

Authors: Glenn Hubbard, Anthony Patrick O'Brien, Matthew P Rafferty

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