Structured Settlements

1.You have been offered a “structured” settlement from an insurance company after being involved in an auto accident. Under the terms of the agreement, you will be paid the following amounts:

Today: ,000
One year from today:,000
Two years from today:,000
Three years from today:,000
Four years from today:,000

You decide that you would rather receive the entire lump sum today. Using a 5% interest assumption, how much should the insurance company be willing to pay you in one lump sum today?

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