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Question: Sarah has won a lottery that pays her $90 000 at the end of this year, $110 000 at the end of next year, $130 000 the following year, and so on, for 30 years. Leon has offered Sarah 2, 400,000 today in exchange for all the money she will receive. Sarah will get 10% interest on her savings. What is the present worth of Sarahs lottery win? Is this a good deal for Sarah?

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M92586545

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