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Julie and Heather bought a winning lottery ticket. Julie chose to receive $1,700,000 today. Heather chose to receive her winnings in 3 equal annual payments
Julie and Heather bought a winning lottery ticket. Julie chose to receive $1,700,000 today. Heather chose to receive her winnings in 3 equal annual payments of $675,000 each. Who made the better decision and by how much (considering only the time-value of money)? Assume an interest rate of 4% and compute the difference between the alternatives in today's dollars.
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