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15. You just won the lottery! You have two options to receive the lottery winnings. Option 1 is that you would receive $25,000 forever. Even
15. You just won the lottery! You have two options to receive the lottery winnings. Option 1 is that you would receive $25,000 forever. Even better, this payment will grow at 2% into perpetuity. Sadly however, this payment won't begin until 7 years from today. Option 2 is that you would receive $1,300,000 today. If you assume a discount rate of 3.5%, which would you chose and why? A) Option 1 because it is worth $55,834.41 more than Option 2. B) Option 1 because it is worth $9,984.93 more than Option 2. C) Option 1 because it is worth $336,666.67 more than Option 2. D) Option 2 because it is worth $9,984.93 more than Option 1
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