John decided to retire from his job after 28 years. His annual retirement payment is equal to 3% of his final three years income times the number of years of service. His salary was $48,000, which was up from $45,000 and $37,000 in the prior two years.

Based on this information, what annual benefit is Joe eligible to receive in dollars?

Joe is interested in his benefit, he would consider taking a lump sum with the first payment coming one year from today. If his life expectancy is 20 years from today and the prevailing market rate is 7%, what should the lump sum be if the annual defined benefit is $40,000?

note: the answer to the prior problem is NOT $40,000, but assuming that is the answer.