Your Aunt Is Evaluating Her Retirement Pension

question 99

Multiple Choice

Your aunt is evaluating her retirement pension.She can retire at age 65 and collect $1,000 per month for the rest of her life.Assume that payments begin one month after her 65^th birthday.If your aunt lives to be exactly 80 years old and can earn 7% interest (compounded monthly) ,what is the equivalent lump sum she would need at retirement to equal the value of the pension?

• A) $106,906
• B) $111,256
• C) $115,313
• D) $215,027

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