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Wiseman Video plans to make four annual deposits of $2,000 each to a special building fund. The fund’s assets will be invested in mortgage instruments expected to pay interest at 12% on the fund’s balance. Using the appropriate annuity table, determine how much will be accumulated in the fund on December 31, 2014, under each of the following situations:
1. The first deposit is received on December 31, 2011, and the interest is compounded annually.
2. The first deposit is received on December 31, 2010, and the interest is compounded annually.
3. The first deposit is received on December 31, 2010, and the interest is compounded annually.
4. The first deposit is received on December 31, 2010, interest is compounded annually, and interest earned is withdrawn at the end of each year.

Answer each of the following independent questions

1. Alex Meir recently won a lottery and has the option of receiving one of the following three prizes.

(1) 64,000 cash immediately,
(2) $20,000 cash immediately and six-period annuity of $8,000 beginning one year from today,
(3) a six period annuity of $8,000 beginning one year from today, or
(4) a six year period annuity of $13,000 beginning one year from today.

Assuming an interest rate of 6%, which option would Alec choose?

2. The Weiner Corporation wants to accumulate a sum of money to repay certain debts due on December 31, 2020. Weiner will make annual deposits of $100,000 into a special bank account at the end of each of 10 years beginning December 31, 2011. Assuming that the banks pays 7% interest compounded annually, on December 30, 2014 what will be the fund balance after the last payment?