SOLUTION: Your grandfather is planning to retire this year. His firm has offered him a lumpsum retirement payment of $50,000 now or a $6,000 life time ordinary annuity whichever he chooses.

Question 1161295: Your grandfather is planning to retire this year. His firm has offered him a lumpsum retirement payment of $50,000 now or a $6,000 life time ordinary annuity whichever he chooses. Your grandfather is in reasonably good health and expects to live for at least 10 years more. Which option should he choose, assuming that an 7 percent annual interest rate is appropriate to evaluate the annuity?
Answer by ikleyn(52925) (Show Source): You can put this solution on YOUR website!
.

After reading this post, I can not understand about the grandfather:

    Is he going to live spending/withdrawing this money gradually for living,

    Or he is going to accumulate them increasing the amount at the account further, without withdrawing ?

Could you clarify, please ?

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