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Doug just received a settlement from a lawsuit that pays him $125,000 immediately, followed by amounts of $125,000 at the end of each year over
Doug just received a settlement from a lawsuit that pays him $125,000 immediately, followed by amounts of $125,000 at the end of each year over the next 10 years with one exception lawyer fees reduce the amount in Year 3 to $75,000. However, the lawsuit allows Doug to receive the equivalent present value today. Using an interest rate of 6.5%, which of the following comes closest to the equivalent present value?
a. | $1,200,000 | |
b. | $ 857,145 | |
c. | $ 898,604 | |
d. | $ 666,666 | |
e. | $ 982,211 |
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