Item$5$

Item $5$

When Marilyn Monroe died, ex$-$husband Joe DiMaggio vowed to place fresh flowers on her grave every Sunday as long as he lived. The week after she died in $1962,$ a bunch of fresh flowers that the former baseball player thought appropriate for the star cost about $$5.$ Based on actuarial tables, "Joltin' Joe" could expect to live for $36$ years after the actress died. Assume that the EAR is $10\mathrm{.}4$ percent. Also, assume that the price of the flowers will increase at $4\mathrm{.}4$ percent per year, when expressed as an EAR. Assuming that each year has exactly $52$ weeks, what is the present value of this commitment? Joe began purchasing flowers the week after Marilyn died.

Multiple Choice

$$3,906\mathrm{.}10$

$$3,825\mathrm{.}56$

$$4,026\mathrm{.}91$

$$4,228\mathrm{.}25$

$$4,147\mathrm{.}72$