3.pdf - 10/4/2019 3. Assignment Print View Award: 2 out of...

10/4/2019 Assignment Print View
… 2/3
3.
Award: 2 out of 2.00 points
Answer each of the following independent questions.
Alex Meir recently won a lottery and has the option of receiving one of the following three prizes: (1) $70,000 cash immediately, (2)
$24,000 cash immediately and a six-period annuity of $8,100 beginning one year from today, or (3) a six-period annuity of $14,500
beginning one year from today. ( FV of $1 , PV of $1 , FVA of $1 , PVA of $1 , FVAD of $1 and PVAD of $1 ) (Use appropriate factor(s)
from the tables provided.)
1. Assuming an interest rate of 7%, determine the present value for the above options. Which option should Alex choose?
2. The Weimer Corporation wants to accumulate a sum of money to repay certain debts due on December 31, 2030. Weimer will make
annual deposits of $130,000 into a special bank account at the end of each of 10 years beginning December 31, 2021. Assuming that