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

anonymous · Answer

These are the options
 	a. Lump Sum: by $14,899.82 	
	b. Lump Sum: by $43,535.88 	
	c. Annuity: by $14,899.82 	
	d. Annuity: by $43,535.88