Imagine you have won the lump sum amount of $2050 in a recent contest. However,...
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Accounting
Imagine you have won the lump sum amount of $2050 in a recent contest. However, you must wait until the end of 4 years to receive the money. However, you would prefer a different pattern of payments: $325 today and then receive some unknown LUMP SUM (i.e. one time) amount that will be received in 4 years.
Using an interest rate of 4.50%, determine the unknown lump sum amount that would make the present value of both prizes equivalent.
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