You are the Treasurer of Maroon Enterprises. The CEO is considering offering a pension plan to her employees. There are two options.

The first option would pay employees an annual pension in the amount of: 2% multiplied by the number of years they have worked multiplied by the average of their highest five years earnings. This plan would pay pensions on average for 35 years.

The second option would pay an annual pension of: 1.50% multiplied by the number of years they have worked multiplied by the average of their highest five years earnings. This plan would pay pensions on average for 35 years. This plan, however, would increase the payment by 2% per year.

Assume the average employee has worked for 30 years and the average of their best five years highest income is $100,000.

Also assume that for the 30 years during which time the average employee has worked, the employee has contributed $5,000 per year to the plan and the company, Maroon, has also contributed $5,000 per employee to the plan.

The CEO would like to know for each option, how much would Maroon have to fund today to pay the future pensions for 35 years.