You are an attorney representing a person who has become Injured in accident. The insurance company...

You are an attorney representing a person who has become Injured in accident. The insurance company agrees to a total award with a present value of $2,000,000 that will be paid out over 25 years.

If the insurance company applies a discount rate of 5% to the award, what can they afford to pay your client each year?

You advise your client that the insurance company should apply a 7% discount rate, what can your client now receive each year?

Suppose, the insurance company agrees to 6%, but stipulates that the offer? Why or why not?

Expert Solution

ekkarill92 answered 2 years ago

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