You won a lottery. There are two payment options: either you get $10,000 immediately, or...
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You won a lottery. There are two payment options: either you get $10,000 immediately, or you can receive $12,000 two years later. If your savings account provides a 6% annual rate compounded monthly, which alternative should you choose? There is no default risk and use monthly interest rate of 6%/12 =0.5%
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