Chapter 4.2, Problem 12E

Reminder Round all answers to two decimal places unless otherwise indicated.

How Fast Do Exponential Functions Grow? At age $25$, you start to work for a company and are offered two rather fanciful retirement options.

Retirement Option 1 When you retire, you will be paid a lump sum of $\$25,000$ for each year of service.

Retirement Option 2 When you start to work, the company will deposit $\$10,000$ into an account that pays a monthly interest rate of $1\%$. When you retire, the account will be closed and the balance given to you.

Which retirement option is more favorable to you if you retire at age $65$? Which retirement option is more favorable if you retire at age $55$?