Option gives you better payout once you retire

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Reference no: EM131830317

You've just started a new job and the human resource director has presented you with two different retirement investment options. With option a, you will have $300 taken out of your paycheck each month ($3,600 annually) and are projected to receive an interest rate of 8% compounded quarterly (four times per year). Option b is a retirement option has the same contribution expectation ($3,600 annually), but the interest rate is 5% and is compounded semi annualy(twice per year). In either case, you expect to work and contribute to your retirement in the same fashion for th enext 25 years.

1. Which retirement option gives you a better payout once you retire?

2. What other important financial factors might you ask your human resource director about regarding your retirement?(hint: there are a number of important factors to consider with such a long investment) Briefly discuss TWO of the factors you would consider?

Reference no: EM131830317

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