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?
Lump Sum: by $14,899.82
Lump Sum: by $43,535.88
Annuity: by $14,899.82
Annuity: by $43,535.88

Question

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?
 Lump Sum: by $14,899.82
 Lump Sum: by $43,535.88
 Annuity: by $14,899.82
 Annuity: by $43,535.88