Today Is Your 30^th Birthday and You Must Choose Between

question 116

Essay

Today is your 30^th birthday and you must choose between two retirement options.The first option will provide you with 10 equal annual payments of $100,000 beginning on your 65^th birthday.The second option will provide you with one payment of $1,000,000 on your 70^th birthday.If the interest rate is 6 percent per year and you are assured of living to at least 80 years of age,which option is better?

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Definitions:

Sea Bottom

The lowest part of a sea or ocean, consisting of sediment and the underlying bedrock.

Time Period

A length of time during which a sequence of events occurs, often used to identify historical or geological eras.

First Organisms

The first organisms refer to the earliest forms of life on Earth, which are believed to be simple, single-celled organisms that appeared billions of years ago.

Trilobites

Extinct marine arthropods with a hard exoskeleton, which lived between the Cambrian and Permian periods, serving as important index fossils.