It is now December 31 2011 (t = 0) and a jury just found in favor of a woman who sued the city for injuries sustained in a January 2010 accident. She
requested recovery of lost wages plus $850000 for pain and suffering plus $170000 for legal expenses. Her doctor testified that she has been unable to work
since the accident and that she will not be able to work in the future. She is now 62 and the jury decided that she would have worked for another 3 years. She
was scheduled to have earned $35000 in 2009. (To simplify this problem assume that the entire annual salary amount would have been received on December 31
2010.) Her employer testified that she probably would have received raises of 3% per year. The actual payment for the jury award will be made on December 31
2012. The judge stipulated that all dollar amounts are to be adjusted to a present value basis on December 31 2012 using a 5% annual interest rate using
compound not simple interest. Furthermore he stipulated that the pain and suffering and legal expenses should be based on a December 31 2010 date. How
large a check must the city write on December 31 2012? Round your answer to the nearest cent.

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