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Problem:

A brilliant young scientist is killed in a plane crash. It is anticipated that he could have earned $240,000 a year for the next 50 years. The attorney for the plaintiff's estate argues that the lost income should be discounted back to the present at 4 percent. The lawyer for the defendant's insurance company argues for a discount rate of 8 percent.

Requirement:

Question: What is the difference between the present value of the settlement at 4 percent and 8 percent? Compute each one separately.

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M91175215

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