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1. Sam was injured in an accident, and the insurance company has offered him the choice of $46,000 per year for 15 years, with the

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1. Sam was injured in an accident, and the insurance company has offered him the choice of $46,000 per year for 15 years, with the first payment being made today, or a lump sum. If a fair return is 7.5%. how large must the lump sum be to leave him as well off financially as with the annuity? (3)

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