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Question
Geraldine was injured in a car accident, and the insurance company has offered her the choice of $25,000 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 her as well off financially as with the annuity?a. $225,367
b. $237,229
c. $249,090
d. $261,545
e. $274,622
Answer
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