A plaintiff in a successful lawsuit was awarded a judgment of $4800 per month for 5 years. The plaintiff has the need of a fairly large sum of money immediately for an investment of his own, and has offered the defendant the opportunity to pay off the award in a lump-sum amount of $110,000. If the defendant accepts the offer and pays the $110,000 now, what rate of return will the defendant have made by not paying the 60 monthly amounts?

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
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Chapter1: Making Economics Decisions
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A plaintiff in a successful lawsuit was awarded a
judgment of $4800 per month for 5 years. The
plaintiff has the need of a fairly large sum of money
immediately for an investment of his own, and has
offered the defendant the opportunity to pay off the
award in a lump-sum amount of $110,000. If the
defendant accepts the offer and pays the $110,000
now, what rate of return will the defendant have
made by not paying the 60 monthly amounts?

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