You plan to retire in 10 years. Calculate the future value of the investment if you save $27,500 (Option 1) a year for the last five years before retirement or $16,250 (Option 2) for each of the 10 years. You are able to earn 9 percent interest on your investments. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided.)

Option1 Future Value:

Option2 Future Value:

2)Which option will you choose?

2.

Judge Drago has decided to set up an educational fund for his favorite granddaughter, Emma, who will start college in one year. The judge plans to deposit an amount in a savings account that pays 9 percent interest. He wants to deposit an amount that is sufficient to permit Emma to withdraw $20,000 starting in one year and continuing each year for a total of four years. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided.)

How much should he deposit today to provide Emma with a fund to pay for her college tuition?

3.An investment will pay $20,000 at the end of the first year, $30,000 at the end of the second year, and $50,000 at the end of the third year. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided.)

Determine the present value of this investment using a 10 percent interest rate.