What lump sum today will be equivalent to the future annual


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A client can choose between receiving 10 annual $100,000 retirement payments, starting one year from today, or receiving a lump sum today. Knowing that he can invest at a rate of 5 percent annually, he has decided to take the lump sum. What lump sum today will be equivalent to the future annual payments?

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Financial Management: What lump sum today will be equivalent to the future annual
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