Which choice is worth more in dollars today

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Question

You are given a choice from an insurance settlement; 30,723 dollars today in a single payment, or 5,000 dollars per year paid at the end of each year for the next 10 years. If your discount rate is 10 percent, answer the following questions.

a) Which choice is worth more in dollars today?

b) Which choice is worth more at the end of year 10, assuming all payments are reinvested at the discount rate?

Reference no: EM132380832

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