1. You have been given the choice between two retirement policies:
Policy A:You will receive annual payments of $26,000 beginning thirty five years from now for twenty years.
Policy B:You will receive one lump sum of $200,000 in forty years. Which policy should you choose assuming an annual interest rate of 12percent?
Policy A
Policy B
2. You must decide between $25,000 in cash today or $30,000 in cash to be received two years from now. If you can earn 8 percent interest on your investments, which is the better deal?
$30,000 in two years
$25,000 today
Either options are Okay