Select the correct answer from each drop-down menu. John is preparing to retire, and he knows he'll receive a pension from his
company. The pension will pay John $25,000 per year
for 20 years. A lump-sum payment of $500,000 today is also an option for John, and the account John would use for that money
would pay interest of 3% per year, compounded annually.
Since the present value of all the yearly pension payments is
John should choose the
option for his pension.

John is preparing to retire, and he knows he’ll receive a pension from his company. The pension will pay John $25,000 per year for 20 years. A lump-sum payment of $500,000 today is also an option for John, and the account John would use for that money would pay interest of 3% per year, compounded annually.

Since the present value of all the yearly pension payments is "$371,937"

, John should choose the "lump-sum"  option for his pension.

Step-by-step explanation:

I got it right on Plato