Timothy is retiring from his job soon at which time his employer will make the following offer: 1. A lumpsum amount of $200,000 2. A sum of $15,000 at the beginning of each year for the next 25 years. If the average interest rate is likely to be 5.5% p.a. for the next 25 years, which option should Timothy choose?
Timothy is retiring from his job soon at which time his employer will make the following offer: 1. A lumpsum amount of $200,000 2. A sum of $15,000 at the beginning of each year for the next 25 years. If the average interest rate is likely to be 5.5% p.a. for the next 25 years, which option should Timothy choose?
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 23P
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Transcribed Image Text:Timothy is retiring from his job soon at which time his employer will make the following offer: 1. A lumpsum
amount of $200,000 2. A sum of $15,000 at the beginning of each year for the next 25 years. If the average
interest rate is likely to be 5.5% p.a. for the next 25 years, which option should Timothy choose?
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