Max has just won some money on a game show. He has the option to take a lump sum payment of $500,000 now or get paid an annuity of $4,900 per month for the next 10 years. Assuming the growth rate of the economy is 2.9% compounding annually
over the next 10 years, which
is the better deal for Max and by how much? (20 points)
Ob Lump Sum: by $4,145.41
Oc Annuity: by $88,000.00
Od Annuity: by $4,145.41
Оа Lump Sum: by $77,462.75