A sweepstakes winner may select either a perpetuity of 2,000 a month beginning with the first payment
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A sweepstakes winner may select either a perpetuity of £2,000 a month beginning with the first payment in one month or an immediate lump sum payment of £350,000. If the annual discount rate is 6% compounded monthly, the present value of the perpetuity is:
A. less than the lump sum.
B. equal to the lump sum.
C. greater than the lump sum.
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Nyron Beeput
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