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Congratulations! You just won $ 1 5 0 , 0 0 0 in the state lottery. You can pick - up $ 1 5 ,

Congratulations! You just won $

150, 000

in the state lottery. You can pick

-

up $

15, 000

today and get the remainder in annual payments of the same amount. Choose the appropriate discount

rate and calculate the Present Value

(

) .

What happens if the payments increase by

2 %

per year?

Please justify your choice of discount rate.

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