Patricia is 66 years old and is planning to retire this year.She is covered under her company's retirement policy which gives her two payment options.The first option is to receive annuity payments of $20,000 each year for the next 20 years.The second option is to receive $250,000 immediately upon retirement.The interest rate is 4%.
Required:
a.What is the present value of Patricia's first option?
b.What is the present value of Patricia's second option?
c.Which option should Patricia choose?
Unit 9-2,

Question

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The Answer of Patricia is 66 years old and is planning to retire this year.She is covered under her company's retirement policy which gives her two payment options.The first option is to receive annuity payments of $20,000 each year for the next 20 years.The second option is to receive $250,000 immediately upon retirement.The interest rate is 4%.
Required:
a.What is the present value of Patricia's first option?
b.What is the present value of Patricia's second option?
c.Which option should Patricia choose?
Unit 9-2,

Patricia Is 66 Years Old and Is Planning to Retire