12. Alex Meir recently won a lottery and has the option of receiving one of...
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12. Alex Meir recently won a lottery and has the option of receiving one of the following three prizes: 1. $54,000 cash immediately 2. $20,000 cash immediately and six period annuity of $8,000 3. Six period annuity of $13,000 beginning one year from today. Assuming an interest rate of 6 %, which option should Alex choose? A) Option 1 B) Option 2 C) Option 3 D) Indifferent between option 1 and option 2 13. Beginning today, six annual deposits of $1,000 each will be made into an account paying 6 %. What will be the balance in the account one year after the sixth deposit is made? A) $6,000 B) $6,975.32 C) $7,393.84 D) $1,418.52
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