The Solution to This Problem Requires Time Value of Money

question 92

Multiple Choice

The solution to this problem requires time value of money calculations. Reference to Tables 9-1 through 9-4 in the text is necessary to complete the calculations. Winston wins the lottery. He wins $20,000 per year to be paid to him for 10 years. The state offers him the choice of a cash settlement now instead of the annual payments for 10 years. If the interest rate is 6%, what is the amount the state will offer for a settlement today?

• A) $147,200
• B) $200,000
• C) $154,440
• D) $175,000

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Definitions:

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The medical approach to reducing pain and improving the quality of life for those suffering from chronic or acute pain.

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