Marlon has just won some money on a game show! He has the option to take a lump sum payment of $625,000 now or get paid an annuity of $4,500 per month for the next 15 years. Assuming the growth rate of the economy is 3.9% compounding annually over the next 15 years, which is the better deal for Marlon and by how much?

Question

anonymous · Answer

a. Lump Sum: by $299,464.04	
	 b. Lump Sum: by $20,387.02	
	 c. Annuity: by $185,000.00	
	 d. Annuity: by $20,387.02