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You have just won the lottery and you can choose between the following payout options. The annual interest rate (EAR) is 10%. a) $100,000 right

You have just won the lottery and you can choose between the following payout options. The annual interest rate (EAR) is 10%. a) $100,000 right now and $60,000 every two years starting 4 years from now and ending 16 years from now (i.e., payments are at t = 0, t = 4, t = 6, ... , t = 14, t = 16). b) $60,000 a year for 20 years with the first payment one year from today (i.e., payments are at t = 1, 2, 3 ... 19, 20). c) 25 annual payments of $45,000 and a 26th payment of $299,000. The first payment is made right now, and the $299,000 payment is made two years after the last $45,000 payment. How much more is the best option worth today relative to the worst option?

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