1. You are retiring today and must choose to take your retirement benefits either as a lump sum or as an annuity. Your companys benefits officer presents you with two alternatives: An immediate lump sum of $2.865 million or an annuity with 30 payments of $115,000 a year with the first payment starting in one years time. The interest rate at your bank is 1.3% percent per year compounded annually. Which option has the greater present value? (Ignore any tax differences between the two options.)