Personal Finance (8th Edition) (What's New in Finance)
8th Edition
ISBN: 9780134730363
Author: Arthur J. Keown
Publisher: PEARSON
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Chapter 15, Problem 3DC2
Summary Introduction
To determine:
Will T & M choose the lump sum payment or
Introduction:
Annuity is the mode of payment made at continuous interval to the individual or spouse during the life of the individual. The annuity amount is remaining same at every payment it does not change with the change in inflation rate.
Lump sum payment
in this an individual receive the amount of retirement in one single payment. In nutshell, the person who is spending amount at the time of employment for the retirement benefit, receives a single amount at the time of retirement instead of annuity payment.
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