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Question: as the winner of a song writing competition you can...

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As the winner of a song writing competition, you can choose between the prizes listed below. If the interest rate is 8 percent, which prize is the most valuable?

a.

$100,000 now.

b.

$9,000 a year forever.

c.

$160,000 at the end of five years.

d.

$7,000 next year and increasing by 2.25 percent a year forever.

e.

$16,500 each year for 10 years.

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