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Should accept the one-payment settlement

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As a settlement in an automobile injury lawsuit, Robyn will receive $30000 each year for the next 25 years, for a total of $750000. The insurance company is offering a one-payment settlement of $300000, now.

Problem a. Should she accept the one-payment settlement of $300,000? Assuming that the money can be invested at 9% annual interest. Why?

Problem b. If Robyn could invest the settlement at 8% interest, should she still accept the lump-sum offer? Why?

Reference no: EM132930719

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