Question: Given a choice between $1,000 a year for 8 years with the first payment paid today vs. a single lump-sum payment of $6500 today, assuming

Given a choice between $1,000 a year for 8 years with the first payment paid today vs. a single lump-sum payment of $6500 today, assuming the market rate is 5%, a rational investor would:

A. Have no idea what to do

B. Be indifferent regarding the choice

C. Prefer $1,000 a year

D. Prefer the lump sum of $6500 today

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