Provide Anne with Financial advice on which option has the potential to yield the highest monetary value.Support your rational with calculations using time value of money and comment on the risk return relationship for each option,assume interest rate on savings is 4 %and is compounded semi annually.

Anne is a 55 year old accountant who works at BDO who is about to retire.She has the following decision to make:

Option A -select a lump sum gratuity payment of $120000 with a reduced pension of $1750 per month.

Option B- select a monthly pension of $3300 with no lump sum gratuity payment.

In addition,Anne has a loan $72000 with loan payments of $1200 per month for the next five years.