Calculate the present value of each option

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Reference no: EM132961207

After completing a long and successful career as senior vice president for a large bank, you are preparing for retirement. After visiting the human resources office, you have found that you have several retirement options to choose from:

An immediate cash payment of $1.18 million.
Payment of $53,000 per year for life.
Payment of $43,000 per year for 5 years and then $63,000 per year for life (this option is intended to give you some protection against inflation).

You believe you can earn 9 percent on your investments and your remaining life expectancy is 10 years.

Required:

Problem 1. Calculate the present value of each option. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) (Use appropriate factor(s) from the tables provided. Do not round intermediate calculations. Enter your answers in whole dollars, not in millions. Round the final answer to nearest whole dollar.)

Reference no: EM132961207

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