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Bob has offered Alice the choice between the following two options: Option A) Receive $10,000 in one year from today Option B) Receive $500 every

Bob has offered Alice the choice between the following two options:

Option A) Receive $10,000 in one year from today Option

B) Receive $500 every year starting one year from today

The interest rate is fixed at 5%. Alice wants to choose the option with the higher present value. Calculate the present value for each option and determine which option should she choose?

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