Question

Ralph has been awarded some money in a settlement. He has the option to take a lump sum payment of $425,000 or get paid an annuity of $2,000 per month for the next 25 years. Which is the better deal for Ralph and by how much assuming the growth rate of 5.15% per year?

Answer 1

I answered your last post for this kind of problem. How about giving me your thoughts on how to start with this question ?
It is a straightforward problem.

Answer 2

I think the lump sum is the better deal by $91,772.64.