Ah. I didn't even see option d. For some reason I skipped immediately down to option e, and saw forever and thought "that's a pretty stupid question...that's not realistic!".
Of course, $6,500 next year and increasing thereafter by 5 per cent a year forever would be better for you if you lived another 45 years (about where I calculated that option d would be better than option e), but it would be better for your descendants in every case, if it really goes forever.
I still don't get the significance of 12% interest. Are they saying you put the money away and don't touch it ever? If so, what's the point?
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