Randy has been awarded some money in a settlement. He has the option to take a lump sum payment of $300,000 or get paid an annuity of $2,000 per month for the next 20 years. Which is the better deal for Randy, and by how much, assuming the growth rate of the economy is 5.65% per year? (2 points)

Lump Sum: by $23,606.12
Lump Sum: by $16,726.56
Annuity: by $23,606.12
Annuity: by $16,726.56

Question

Randy has been awarded some money in a settlement. He has the option to take a lump sum payment of $300,000 or get paid an annuity of $2,000 per month for the next 20 years. Which is the better deal for Randy, and by how much, assuming the growth rate of the economy is 5.65% per year? (2 points)
 	
	Lump Sum: by $23,606.12
	Lump Sum: by $16,726.56
	Annuity: by $23,606.12
	Annuity: by $16,726.56

anonymous · Answer

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