Linda's husband has just passed away and she is entitled to $100,000 insurance benefit. She...
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Linda's husband has just passed away and she is entitled to $100,000 insurance benefit. She chooses to receive the benefit annually over 15 payments, with the first payment immediately. Suppose the interest rate that her benefit gets is 4%, but the insurance company can actually invest the money at 5%. How much is the insurance company making (in terms of present value) by paying out the benefit in installments instead of in a lump sum?
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