You have an investment that provides a perpetuity of $1,200 , and your friend has an annuity of the same amount for 21 years. Assume an interest rate of 5.80% and cash flows at the end of each year. How much more is your investment worth compared to that of your friend?

a.

$5,985

b.

$6,699

c.

$6,332

d.

$8,394

e.

$4,394