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Your rich aunt offers you the choice of 2 pay-outs today: Choice 1: $1000 paid every year for 5 years, with the first payment to

Your rich aunt offers you the choice of 2 pay-outs today:

Choice 1: $1000 paid every year for 5 years, with the first payment to be received at the end of year 4

Choice 2: $3000 paid today

If the discount rate and compounding rate are both 10%, use PV approach to identify the better offer

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