Would you rather receive: $5,500 at the end of three years, $1,200 per year for 7...

Would you rather receive: $5,500 at the end of three years, $1,200 per year for 7 years or $750 per year for 15 years if the discount rate is 20%?

5a) Would your answer change if discount rate is 2%? If the answer does change, explain in a simple sentence “why”/what happened?

Expert Solution

jeff jeffy answered 1 year ago

a. You will receive an annuity payment of $1,200 at the end of each year for...

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Suppose you receive $100 at the end of each year for the next three years. a....

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