Your mother is planning to retire this year. Her firm has offered her a lump-sum retirement payment of $40,000 or a $7,000 lifetime annuitywhichever she chooses. Your mother is in reasonably good health and expects to live for at least 17 more years. Calculate the present values of each alternative, assuming that an 10 percent interest rate is appropriate to evaluate the annuity. Use Table IV or a financial calculator to answer the question. Round your answer to the nearest dollar.

Lump sum payment: $

Lifetime annuity: $

Which option should she choose?