Exercise $5-15($Static$)$ Future and present value $[$L$05-3,5-7,5-8]$

Answer each of the following independent questions.

You recently won a lottery and have the option of receiving one of the following three prizes: $(1)$ $$64,000$ cash immediately, $(2)$

$$20,000$ cash immediately and a six$-$year annual annuity of $$8,000$ beginning one year from today, or $(3)$ a six$-$year annual

annuity of $$13,000$ beginning one year from today. Assuming an interest rate of $6\%$ compounded annually, determine the present.

value for the above options. Which option should you choose?

A company wants to accumulate a sum of money to repay certain debts due in the future. The company will make annual

deposits of $$100,000$ into a special bank account at the end of each of $10$ years. Assuming the bank account pays $7\%$ interest

compounded annually, what will be the fund balance after the last payment is made in ten years?

Note: Use tables, Excel, or a financial calculator. $($FV of $$1,$ PV of $$1,$ FVA of $$1,$ PVA of $$1,$ FVAD of $$1$ and PVAD of $$1)$

Complete this question by entering your answers in the tabs below.

Required $1$

You recently won a lottery and have the option of receiving one of the following three prizes: $(1)$ $$64,000$ cash immediately,

$(2)$ $$20,000$ cash immediately and a six$-$year annual annuity of $$8,000$ beginning one year from today, or $(3)$ a six$-$year

annual annuity of $$13,000$ beginning one year from today. Assuming an interest rate of $6\%$ compounded annually, determine

the present value for the above options. Which option should you choose?

Note: Round your final answers to nearest whole dollar amount.

Show less $4$

A company wants to accumulate a sum of money to repay certain debts due in the future. The company will make annual

deposits of $$100,000$ into a special bank account at the end of each of $10$ years. Assuming the bank account pays $7\%$ interest

compounded annually, what will be the fund balance after the last payment is made in ten years?

Note: Round your final answers to nearest whole dollar amount.