After 15 years of working for one employer, youtransfer to

Chapter , Problem 7-79

(choose chapter or problem)

After 15 years of working for one employer, youtransfer to a new job. During each of these yearsyour employer contributed (that is, she diverted fromyour salary) $1500 to an account for your retirement(a fringe benefit), and you contributed a matchingamount each year. The whole fund was invested at5% during that time, and the value of the accountnowstands at $30,000.You are now faced with two alternatives. (1) Youmay leave both contributions in the fund until retire-ment in 35 years,during which you will get the futurevalue of this amount at 5% interest per year. (2) Youmay take out the total value of your contributions,which is $15,000 (one-half of the total $30,000). Youcan do as you wish with the money you take out, butthe other half will be lost as far as you are concerned.In other words, you can give up $15,000 today for thesakeof getting the other$15,000now.Otherwise,youmust wait 35 years to get the accumulated value ofthe entire fund. Which alternative is more attractive?Explain your choice.