Compute the present value of the lump-sum settlement


Rather than pay you $1,000 a month for the next 20 years, the person who injured you in an automobile accident is willing to pay a single amount now to settle your claim for injuries. Would you rather use an interest rate of 6% or 12% in computing the present value of the lump-sum settlement? Comment or explain.

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Finance Basics: Compute the present value of the lump-sum settlement
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