What is the difference in pv between two retirement option

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Reference no: EM131513827

You’ve just retired after a 25 year career with a wildlife consulting firm. Your employer offers you two retirement options. Option A pays you $2,000 per month for 20 years. Option B pays you $1,000 a month in perpetuity (your heirs will receive this even after you pass on). Both options send you the first check in one month.

1. Which retirement option will give you the greatest present value, assuming your ARR is 6%?

2. What is the difference in PV between the two retirement options?

Reference no: EM131513827

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