Rudy has been awarded some money in a settlement. He has the option to take a lump sum payment of $200,000 or get paid an annuity of $1,000 per month for the next 25 years. Which is the better deal for Rudy, and by how much, assuming the growth rate of the economy is 2.75% per year?

Question

pooja195 · Answer

If you take the 200k and invest it in bonds at 2.75%, you will have 394k after 25 years.
If you take the 12k a year and buy bonds at 2.75% every year you will have 423k after 25 years.

pooja195 · Answer

WELCOME  TO OPENSTUDY!

anonymous · Answer

Lump Sum: by $14,899.82 

Lump Sum: by $43,535.88 

Annuity: by $14,899.82 

Annuity: by $43,535.88 
Which is the answer