John Roberts is 54 years old and has been asked to accept early retirement from his company. The company has offered John three alternative compensation packages to induce John to retire:
1. $180,000 cash payment to be paid immediately.
2. A 20-year annuity of $16,000 beginning immediately.
3. A 10-year annuity of $50,000 beginning at age 65.
Which offer of the three offers should John accept assuming that he is able to invest funds at a 9% rate?