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You just won $400 million playing the Kansas Lottery and must choose between two payment options. Option #1: you can receive $20 million at the

  1. You just won $400 million playing the Kansas Lottery and must choose between two payment options. Option #1: you can receive $20 million at the beginning of the year for 20 years. Option #2: you can receive a single payment today, equal to the discounted present value of the payment stream in Option #1. The applicable interest rate is 6 percent. How much will receive if you choose the single payment in Option #2?

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