As a winner of a competition, you can choose one of the following prizes:
- Â 5,00,000 now
- Â 10,00,000 at the end of 6 years
- Â 60,000 a year forever
- Â 1,00,000 per year for 10 years
- Â 35,000 next year and rising thereafter by 5 percent per year forever.
If the interest rate is 10 percent, which prize has the highest present value.
Â
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