Your sister is the one lucky winner of the Ohio Lottery and is looking to you, as a Finance Major, to help out with some advice. Assuming market interest rates are at 8.50%, on a present value basis how would you consult with her about the choice to

-a) take an annuity of $2,900 per month for 25 years, or

-b) take an annuity of $3,200 per month for 20 years ?

- how much is she better off by choosing the one you recommend, remembering that more is better? NOTE: There are 2 answers required, which is better and by how much.