Problem

You win a judgment in an auto accident for $100,000. You immediately receive $25,000 but...

You win a judgment in an auto accident for $100,000. You immediately receive $25,000 but must pay your lawyer’s fee of $15,000. In addition, you will receive $2,500 a year for 20 years for a total of $50,000, after which the balance owed ($25,000) will be paid. If the interest rate is 7 percent, what is the current value of your settlement?

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Solutions For Problems in Chapter 7