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Question 34 (0.6 points) Sam was injured in an accident, and the insurance company has offered him the choice of $24,000 per year for 15 years, with the first payment being made today, or a lump sum. If a fair return is 7.5%, how large must the lump sum be to leave him as well off financially as with the annuity?
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Answer #1

Lump sum amount=24000+24000/1.075+24000/1.075^2.....
=24000*(1-1/1.075^15)/(1-1/1.075)
=227739.6894

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