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Your sister is the one lucky winner of the Ohio Lottery and is looking to you, as a Finance Major, to help out with some

Your sister is the one lucky winner of the Ohio Lottery and is looking to you, as a Finance Major, to help out with some advice. Assuming market interest rates are at 4.00%, on a present value basis how would you consult with her about the choice to

- take an annuity of $2,200 per month for 25 years, or

- take an annuity of $2,400 per month for 20 years ?

- how much is she better off by choosing the one you recommend, remembering that more is better!

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