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3. YOUR BEST FRIEND PROMISES TO GIVE YOU $500,000 IN 3 YEARS. YOU DEMAND A 12% ANNUAL RATE OF RETURN. HOW MUCH WOULD YOU GIVE

3. YOUR BEST FRIEND PROMISES TO GIVE YOU $500,000 IN 3 YEARS.

YOU DEMAND A 12% ANNUAL RATE OF RETURN. HOW MUCH

WOULD YOU GIVE YOUR FRIEND TODAY?

4. SAME AS ABOVE BUT YOU DEMAND AN 18% ANNUAL RATE OF

RETURN.

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