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A financial planner has recommended two investment plans that have the same investment cost. Under Plan A, you will receive a perpetual payment of $20,000
A financial planner has recommended two investment plans that have the same investment cost. Under Plan A, you will receive a perpetual payment of $20,000 annually, while under Plan B, you will receive an annual payment of $50,000 for 10 years. Both plans will pay out their first installment one year from today. Assuming that the interest rates for both plans are equal, what interest rate would make you indifferent to choosing between the two plans?
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