Rebecca Is Retiring Next Month When She Turns 65

Rebecca is retiring next month when she turns 65.She can select a pension of $1745 monthly guaranteed for the rest of her life,but not indexed for inflation,or take a lump sum of $312 000.Assume she can invest the lump sum at five percent annually and draw the same income as the pension.What age must she reach for the monthly pension to be the better choice?

A) 89
B) 90
C) 92
D) 93

Correct Answer:

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