At retirement, a client has two payment options: a 20-year annuity at 50,000 per year starting after

Question:

At retirement, a client has two payment options: a 20-year at €50,000 per year starting after one year or a lump sum of €500,000 today. If the client's required rate of return on retirement fund investments is 6 percent per year, which plan has the higher present value and by how much?
Annuity
An annuity is a series of equal payment made at equal intervals during a period of time. In other words annuity is a contract between insurer and insurance company in which insurer make a lump-sum payment or a series of payment and, in return,...