Consider the Simplified Payment System for the Victims of 9/11

Multiple Choice

Consider the simplified payment system for the victims of 9/11:
• The family of a 65-year-old service worker earning $10,000 a year receives $300,000 in compensation.
• The family of a 30-year-old bond trader earning $175,000 a year receives $4.35 million.
Which statement best describes the difference in the payments between the service worker and the bond trader?

A) The present value of the bond trader's lifetime income is greater than the service worker's.
B) Because of her age,the bond trader had less savings to rely on so her family received more compensation.
C) The future value of the bond trader's lifetime income is less than the service worker's.
D) Such a discrepancy in compensation would never be the case.
E) None of the above is correct.