Julia Baker died, leaving to her husband Brent an insurance policy contract that provides that the beneficiary (Brent) can choose any one of the four options:

a. $55,000 immediate cash

b. $4,000 every 3 months payable at the end of each quarter for 5 years

c. $18,000 immediate cash and $18,000 every 3 months for 10 years, payable at the beginning of each 3 month period

D. $4,000 every 3 months for 3 years and $1,500 each quarter for the following 25 quarters, all payments payable at the end of each quarter.

Instructions:

If money is worth 2 1/2% per quarter, compounded quarterly which option would you recommend that Brent exercise? Show all work