Mary Riley is about to go to court for injuries sustained in an accident. The insurance company of the other party has offered Mary two alternatives to settle the case before it goes to trial:

a) $250,000 cash payment to be paid immediately

b) A 10-year annuity of $30,000 beginning immediately

Require:

Mary has decided she wants to settle the case before it goes to trial. Which alternative should she choose assuming that she is able to invest funds at a 5% rate?