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Present Value

Suppose that you have a choice between receiving $10,000 now and receiving $1000 per month for the next 12 months. Assuming that you can invest at a 12% annual percentage rate (APR) with monthly compounding. What is the break-even annual rate of return at which you are indifferent between receiving $10,000 now and receiving $1000 per month for 12 months?

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Answer #1

Answer 35.07%

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