John is the CEO of a very successful company. He is healthy and planning on retiring from the company at the age of 55 years to pursue his dream of helping others (I am a bit jealous of John). His company is offering two options for his retirement: Option 1: Five hundred thousand dollars today and $900,000 everyday for next 30 years. Option 2: $900 right now and then double the amount given the previous year for next 30 years. Which option should John choose and why? Please write your advice using complete sentences and mathematical proof (hint: include formulas)!
John is the CEO of a very successful company. He is healthy and planning on retiring from the company at the age of 55 years to pursue his dream of helping others (I am a bit jealous of John). His company is offering two options for his retirement: Option 1: Five hundred thousand dollars today and $900,000 everyday for next 30 years. Option 2: $900 right now and then double the amount given the previous year for next 30 years. Which option should John choose and why? Please write your advice using complete sentences and mathematical proof (hint: include formulas)!
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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