15.

You will need at least $5,600 in four years and your friend says she can either loan you $5,600 all at once four years from now or she can deposit $1,400 in your savings account at the end of each year for the next four years. Your savings account earns 10% interest, compounded annually. Which option would be worth more to you four years from now, and how much more? (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) (Use appropriate factor from the PV tables. Round your final answer to the nearest dollar amount.)

Multiple Choice

• The $5,600 in four years will be worth $705 more than the annual deposits.

• The annual deposits will be worth $897 more than the $5,600 in four years.

• The $5,600 in four years will be worth $897 more than the annual deposits.

• The annual deposits will be worth $705 more than the $5,600 in four years.