A woman who has won a prize is offered either: a lump sum of 100,000 to invest
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Question:
A woman who has won a prize is offered either: a lump sum of £100,000 to invest now, or £55,000 to invest in one year's time and another £55,000 to invest in two years' time. If all investments are assumed to earn interest at a rate of 7% pa effective, determine which option she should choose if she intends to withdraw the money after: (1) 4 years (ii) 2 years.
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