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Q1: You are given the option to select one of the following prizes: A one time payment of $100,000 today, Payments of $7400 at the
Q1: You are given the option to select one of the following prizes:
- A one time payment of $100,000 today,
- Payments of $7400 at the end of each year for 25 years,
- Daily payments of $19 for the next 50 years (assume a 365 day year).
Assume money can earn 6.17% compounded quarterly.
What is the value, in terms of dollars today, of the prize you should select?
Q2: Victoria plans to make deposits of $480 at the end of every three months into a savings account in the hopes of saving up for a used car. If the account earns interest at a rate of 4% compounded quarterly, how much money will she have after 5 years?
I need some help here please!
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