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You can choose one of the following prizes: $100,000 now. $180,000 at the end of five years. $11,400 a year forever. $19,000 for each of
You can choose one of the following prizes:
$100,000 now.
$180,000 at the end of five years.
$11,400 a year forever.
$19,000 for each of 10 years.
$6,500 next year and increasing thereafter by 5% a year forever.
If the interest rate is 12%, which is the most valuable prize and why?
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