Question

Céline has just won a lottery. She will receive a payment of $6,000 at the end of each year for nine years. As an alternative, she can choose an immediate payment of $50,000.
a. Which alternative should she pick if the interest rate is 5 percent?
b. What would the interest rate have to be for Céline to be indifferent about the two alternatives?



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  • CreatedFebruary 25, 2015
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