16. Application of Time Value of Honey Skill Gasin Goldenarm has en playing bubull she was fire years old and has always dreamed of playing in the bu Last season, he was a starting pitcher for a double-A [-level baseball team, the Roswel extraterrestrials last year he was the first runner up for the Minor League Player of the Year award. Using hix of mph fabul, an impeccable curve ball and sider, and relable changeup teh he achieved 17-wn-lou record an earned run warege (ELA) of 2.84, and 100 wirkecuta in 123.2 inninga pitched. He ta alas your buat friend Two weeks ago, on his tree-year anniversary with the team, Gavin received the following email from 's agent Steven Signem- Now, indicating that he is being called up to the El Paso Grandies, the Ferraterrestrials's corresponding Major League Baseball (HLA) team. Meresuun, Gavin't contract is being mvited to mtact his now status. The email de ribes the general terms and condition of Gvine de contract. Contract Evaluation Worksheet Complete the following worksheet by inserting the appropriate value to evaluate the contrast are the related questions. Note: Te dany possible sources of confusion and simplify your calculations: Assume that al bonuses are carned in each of the years for which they are available and are asid at the end o the corresponding yearls), unless specifically stated differently. Their value should be based on the salary in effect at the time the bonused + The endorsement proceeds are paid in accordance with the terms of the deal. Remember that the timing of cash flow affects the interest rate that is used to discount the cash flow. For saman annual interest rates should be used to discount nun enth flowe, and monthly interest rater suced todacount monthly cash fire. Therefore, it may be necessary to compute the appropriate interest rate that should be used in a discounting calculation . Round all dullur arcurta to the rearwat whole delle and carry out all interat rutu factura te four decimal plura When entering intermediate valust se new choicer, he cutaround them to the name della haver when using the same values to calculate arother an de not round From Steven Sign'em-Now To: Gavin Goldenar Subject: New Team, New Contract Proposal Gavin Goldenarm's Contact Faluation Worksheet D CAVI Dergratulational You've been called up to the El Paso Grandwa. Bulumare the offered and conditions of your new contract. Afer you review them and think about the offer call me and we'll discuss your options, Congrats again! Assumptions and Calculated Valves 14 Information: Gavin' Bank Assen Kate compounded ( monthly 4 Monthl, Bank Rate 5 Elractive Annual Interest Rate 5 7 Salary and Bonus Information 3 Annual Salery (455 COLA) 9 Monthly Salary 10 Discount factor (based on Call 64 above) Discounted Annual Salary Year 1 Year 2 Year 3 Year 4 Total valus 3 11.4958 10.5143 9.2013 Salary and Incentives Cavin Gaicerarmere terraferred to as the "Player" is offered four year contract with an annual salary of $414,000 per year to be paid at the end of each month in the contract term. . Under the langua's collecte bargaining Agreement the player wil receve coat of argument (COLA) to his annual salen at the beginning of every other year. This means that the player's anul lury will increase at the beginning of your 2 and year 4 me appliane In addition the player will run-m 5:0.000 min- leaque bonus atar the month of participation with an HLA team. The bonus will be paid immediately on completion of the be manth periec. The Player is offered a performance-based bonus as well as milestore bonus. Both are intended to encourage outstanding performance The Player is offered the Poloning arard-based performance incentives a 15% bonus it he is designated as the Most Valuable Player MP) in the league. The player is also offered the following miletre bonus : $150.000 bora if he ti Nor Hyun's 1979 ainglonatikout word (383 winknute). The Player la ligible for each potunbul benua uach year thus the contract in affect and if expressed as a percentage will be bued on the value of the players bus annual salary for the cerrapercing yanaf www, the prior now and writene bonuses will be distributed in a single payment. Une beginning of the next contract year. Although this propera cereber anyone mintone, the metal contract centers several progressive milestones. Exceeding one milextore create the opportunity to wed another 9.0501 5 5 0.9609 13 TH Mi-Lev,v Bonus 14 Discount factor (based on Cell 4 sbove) 15 Discounted Time-in League Bous 0.9234 0.8326 0.7873 0.7269 17 Milestone Bonus 18 Discount factor (based on Cell 3 above) 19 Discounted Milestone Bonus $ 5 0.9234 0.8526 0.7873 0.7269 In addition to the proposal offered by the Grandies, I've als been able to secure the followng endorsement opportunity! A local car dealer hus offered you contract that will pay $730 e month for the year. The contract contingent on your accepting the contract with the Grundia and will ta uffuct immediately upon signing your MLB contact. In return for these payments, you will participate in the cealer's promotions avante, xush me signina autographs and allowing photographs as requested 2: Dorformance Bonus 22 Discount factor (based on Cell 5 above) 29 Discounted Performance Bonus 24 25 Monthly Endorsement Contact Payment 26 Discount factor (based on Cul 14 ab 27 Diacourted Monthly Enderement Pam 11.4030 10.5140 I've also attached market that you can use to analye the deal. I'm in negotiation for the rest of the day, 29 let's cicas your thoughts on the contruct proposal tomorrow. I'm proud of you Talve care, Steven Suru promo Sporta Apert, RAR Volunt Murugu In. Pas 29 Certruct's Total Nominal Vale 30 Curtruct's Total Diacourtud valus 1. Ghen your worksheet calculators, which of the following statement in curata? le Steven's estimate of the value of Guin contract curate an athere nominal or discounted tex? Check all that apply Cavim exced According to teven, the contract is worth 52 544,400-asuming receipt of all posible bonuses after rerading the email us and calling his family Cavin celed you to review the term of the contract and verify turen's calculator Aftur an extended conversation about what he'll do with haruwfound alth you and Gavin huve pred that any funda received could be invested to earn 8.00% compounded monthly Steven's animate of the value of Cavin's contract la incorrect on a nominal baie and the arrarle $46,930. La appropriate and reasury to discount the underwent contracting the bank account's iluety annual interest rate because of differences in the Emre of the compounding of the bank account and that of te parents on the endorsement contract. Stavenie animate of the naminiwalue of Cavine contract is correct Related Question. The local car dealer creating Guin's endorsement opportunity can eam 6 (compounded quarterly) on his deposited funds. She would have to depoait each quarter start ng exactly two years before the day Cavina ha contrust to find her anderen en contract. Note: The future vulus intueat factor of es compounded quarterly for eight quarterly Wuta 8.4328.) 16. Application of Time Value of Money Skills Gavin Goldenarm has been playing baseball since he was five years old and has always dreamed of playing in the big leagues. Last season, he was a starting pitcher for a double-A (AA)-level baseball team, the Roswell Extraterrestrials; last year, he was the first runner-up for the Minor League Player of the Year award. Using his 97 mph fastball, an impeccable curve ball and slider, and a reliable changeup pitch, he achieved a 17-3 win-loss record, an earned run average (ERA) of 2.84, and 108 strikeouts in 123.1 innings pitched. He is also your best friend. Two weeks ago, on his three-year anniversary with the team, Gavin received the following email from his agent, Steven Sign'em- Now, indicating that he is being called up to the El Paso Grandies, the Extraterrestrials's corresponding Major League Baseball (MLB) team. Moreover, Gavin's contract is being revised to reflect his new status. The email describes the general terms and conditions of Gavin's revised contract. des From: Steven Sign'em-Now To: Gavin Goldenarm Subject: New Team, New Contract Proposal Gavin, Congratulations! You've been called up to the El Paso Grandies. Below are the offered terms and conditions of your new contract. After you review them and think about the offer, call me and we'll discuss your options. Congrats again! Salary and Incentives: . Gavin Goldenarm hereafter referred to as the "Player," is offered a four-year contract with an annual salary of $414,000 per year, to be paid at the end of each month in the contract term. . Under the league's collective bargaining agreement, the Player will receive a 4% cost-of-living adjustment (COLA) to his annual salary at the beginning of every other year. This means that the Player's annual salary will increase at the beginning of year 2 and year 4, as applicable In addition, the Player will receive a one-time $10,000 time-in- league bonus after six months of participation with an MLB team. This bonus will be paid immediately on completion of the six- month period. The Player is offered a performance-based bonus, as well as a milestone bonus. Both are intended to encourage outstanding performance. The Player is offered the following award-based performance incentive: a 15% bonus if he is designated as the Most Valuable Player (MVP) in the league. The Player is also offered the following milestone bonus: a $150,000 bonus if he ties Nolan Ryan's 1973 single-season strikeout record (383 strikeouts). The Player is eligible for each potential bonus each year that the contract is in effect and, if expressed as a percentage, will be based on the value of the Player's base annual salary for the corresponding year. If earned, the performance and milestone bonuses will be distributed in a single payment at the beginning of the next contract year. Although this proposal describes only one milestone, the actual contract contains several progressive milestones. Exceeding one milestone creates the opportunity to exceed another. In addition to the proposal offered by the Grandies, I've also been able to secure the following endorsement opportunity: A local car dealer has offered you a contract that will pay $750 per month for two years. This contract is contingent on your accepting the contract with the Grandies and will take effect immediately upon signing your MLB contract. In return for these payments, you will participate in the dealer's promotional events, such as signing autographs and allowing photographs as requested. I've also attached a worksheet that you can use to analyze the deal. I'm in negotiations for the rest of the day, so let's discuss your thoughts on the contract proposal tomorrow. I'm proud of you! Take care, Steven Steven Sign'em-Now Sports Agent, R&R Talent Management Inc. | El Paso Gavin is so excited! According to Steven, the contract is worth $2,544,400-assuming receipt of all possible bonuses. After rereading the email twice and calling his family, Gavin called you to review the terms of the contract and verify Steven's calculations. After an extended conversation about what he'll do with his newfound wealth, you and Gavin have agreed that any funds received could be invested to earn 8.00%, compounded monthly. Contract Evaluation Worksheet Complete the following worksheet by inserting the appropriate values to evaluate the contract and answer the related questions. Note: To clarify possible sources of confusion and simplify your calculations: Assume that all bonuses are earned in each of the years for which they are available and are paid at the end of the corresponding year(s), unless specifically stated differently. Their value should be based on the salary in effect at the time the bonuses were earned. The endorsement proceeds are paid in accordance with the terms of the deal. . Remember that the timing of a cash flow affects the interest rate that is used to discount the cash flow. For example, annual interest rates should be used to discount annual cash flovs, and monthly interest rates are used to discount monthly cash flows. Therefore, it may be necessary to compute the appropriate interest rate that should be used in a discounting calculation. . Round all dollar amounts to the nearest whole dollar and carry out all interest rate factors to four decimal places. When entering intermediate values as answer choices, be sure to round them to the nearest dollar, however when using those same values to calculate another answer, do not round. Gavin Goldenarm's Contract Evaluation Worksheet A B D E 1 Assumptions and Calculated Values 2 Bank Rate Information: 3 % Gavin's Bank Accoun Rate (compounded monthly) Monthly Bank Rate Effective Annual Interest Rate 4 % 5 % Year 1 Year 2 Year 3 Year 4 Total value Salary and Bonus Information: 8 9 10 Annual Salary (4% COLA) Monthly Salary Discount factor (based on Cell B4 above) Discounted Annual Salary 11.4958 10.6148 9.8013 9.0501 11 12 13 Time-in-League 14 0.9609 Bonus Discount factor (based on Cell B4 above) Discounted Time-in- League Bonus 16 17 Milestone Bonus 18 0.9234 0.8526 0.7873 0.7269 Discount factor (based on Cell BS above) Discounted Milestone Bonus 19 20 21 22 0.9234 0.8526 0.7873 0.7269 Performance Bonus Discount factor (based on Cell B5 above) Discounted Performance Bonus 23 24 25 26 11.4958 10.6148 Monthly Endorsement Contract Payment Discount factor (based on Cell B4 above) Discounted Monthly Endorsement Payment 27 28 29 Contract's Total Nominal Value Contract's Total Discounted Value 30 1. Given your worksheet calculations, which of the following statements is accurate? Is Steven's estimate of the value of Gavin's contract accurate on either a nominal or discounted basis? Check all that apply. Steven's estimate of the value of Gavin's contract is incorrect on a nominal basis, and the error is $46,938. It is appropriate and necessary to discount the endorsement contract using the bank account's effective annual interest rate because of differences in the timing of the compounding of the bank account and that of the payments on the endorsement contract. Steven's estimate of the nominal value of Gavin's contract is correct. Related Question: The local car dealer creating Gavin's endorsement opportunity can earn 5% (compounded quarterly) on his deposited funds. She would have to deposit each quarter, starting exactly two years before the day Gavin signs his contract, to fund her endorsement contract. [Note: The future value interest factor of 6% compounded quarterly for eight quarterly periods is 8.4328.] 16. Application of Time Value of Honey Skill Gasin Goldenarm has en playing bubull she was fire years old and has always dreamed of playing in the bu Last season, he was a starting pitcher for a double-A [-level baseball team, the Roswel extraterrestrials last year he was the first runner up for the Minor League Player of the Year award. Using hix of mph fabul, an impeccable curve ball and sider, and relable changeup teh he achieved 17-wn-lou record an earned run warege (ELA) of 2.84, and 100 wirkecuta in 123.2 inninga pitched. He ta alas your buat friend Two weeks ago, on his tree-year anniversary with the team, Gavin received the following email from 's agent Steven Signem- Now, indicating that he is being called up to the El Paso Grandies, the Ferraterrestrials's corresponding Major League Baseball (HLA) team. Meresuun, Gavin't contract is being mvited to mtact his now status. The email de ribes the general terms and condition of Gvine de contract. Contract Evaluation Worksheet Complete the following worksheet by inserting the appropriate value to evaluate the contrast are the related questions. Note: Te dany possible sources of confusion and simplify your calculations: Assume that al bonuses are carned in each of the years for which they are available and are asid at the end o the corresponding yearls), unless specifically stated differently. Their value should be based on the salary in effect at the time the bonused + The endorsement proceeds are paid in accordance with the terms of the deal. Remember that the timing of cash flow affects the interest rate that is used to discount the cash flow. For saman annual interest rates should be used to discount nun enth flowe, and monthly interest rater suced todacount monthly cash fire. Therefore, it may be necessary to compute the appropriate interest rate that should be used in a discounting calculation . Round all dullur arcurta to the rearwat whole delle and carry out all interat rutu factura te four decimal plura When entering intermediate valust se new choicer, he cutaround them to the name della haver when using the same values to calculate arother an de not round From Steven Sign'em-Now To: Gavin Goldenar Subject: New Team, New Contract Proposal Gavin Goldenarm's Contact Faluation Worksheet D CAVI Dergratulational You've been called up to the El Paso Grandwa. Bulumare the offered and conditions of your new contract. Afer you review them and think about the offer call me and we'll discuss your options, Congrats again! Assumptions and Calculated Valves 14 Information: Gavin' Bank Assen Kate compounded ( monthly 4 Monthl, Bank Rate 5 Elractive Annual Interest Rate 5 7 Salary and Bonus Information 3 Annual Salery (455 COLA) 9 Monthly Salary 10 Discount factor (based on Call 64 above) Discounted Annual Salary Year 1 Year 2 Year 3 Year 4 Total valus 3 11.4958 10.5143 9.2013 Salary and Incentives Cavin Gaicerarmere terraferred to as the "Player" is offered four year contract with an annual salary of $414,000 per year to be paid at the end of each month in the contract term. . Under the langua's collecte bargaining Agreement the player wil receve coat of argument (COLA) to his annual salen at the beginning of every other year. This means that the player's anul lury will increase at the beginning of your 2 and year 4 me appliane In addition the player will run-m 5:0.000 min- leaque bonus atar the month of participation with an HLA team. The bonus will be paid immediately on completion of the be manth periec. The Player is offered a performance-based bonus as well as milestore bonus. Both are intended to encourage outstanding performance The Player is offered the Poloning arard-based performance incentives a 15% bonus it he is designated as the Most Valuable Player MP) in the league. The player is also offered the following miletre bonus : $150.000 bora if he ti Nor Hyun's 1979 ainglonatikout word (383 winknute). The Player la ligible for each potunbul benua uach year thus the contract in affect and if expressed as a percentage will be bued on the value of the players bus annual salary for the cerrapercing yanaf www, the prior now and writene bonuses will be distributed in a single payment. Une beginning of the next contract year. Although this propera cereber anyone mintone, the metal contract centers several progressive milestones. Exceeding one milextore create the opportunity to wed another 9.0501 5 5 0.9609 13 TH Mi-Lev,v Bonus 14 Discount factor (based on Cell 4 sbove) 15 Discounted Time-in League Bous 0.9234 0.8326 0.7873 0.7269 17 Milestone Bonus 18 Discount factor (based on Cell 3 above) 19 Discounted Milestone Bonus $ 5 0.9234 0.8526 0.7873 0.7269 In addition to the proposal offered by the Grandies, I've als been able to secure the followng endorsement opportunity! A local car dealer hus offered you contract that will pay $730 e month for the year. The contract contingent on your accepting the contract with the Grundia and will ta uffuct immediately upon signing your MLB contact. In return for these payments, you will participate in the cealer's promotions avante, xush me signina autographs and allowing photographs as requested 2: Dorformance Bonus 22 Discount factor (based on Cell 5 above) 29 Discounted Performance Bonus 24 25 Monthly Endorsement Contact Payment 26 Discount factor (based on Cul 14 ab 27 Diacourted Monthly Enderement Pam 11.4030 10.5140 I've also attached market that you can use to analye the deal. I'm in negotiation for the rest of the day, 29 let's cicas your thoughts on the contruct proposal tomorrow. I'm proud of you Talve care, Steven Suru promo Sporta Apert, RAR Volunt Murugu In. Pas 29 Certruct's Total Nominal Vale 30 Curtruct's Total Diacourtud valus 1. Ghen your worksheet calculators, which of the following statement in curata? le Steven's estimate of the value of Guin contract curate an athere nominal or discounted tex? Check all that apply Cavim exced According to teven, the contract is worth 52 544,400-asuming receipt of all posible bonuses after rerading the email us and calling his family Cavin celed you to review the term of the contract and verify turen's calculator Aftur an extended conversation about what he'll do with haruwfound alth you and Gavin huve pred that any funda received could be invested to earn 8.00% compounded monthly Steven's animate of the value of Cavin's contract la incorrect on a nominal baie and the arrarle $46,930. La appropriate and reasury to discount the underwent contracting the bank account's iluety annual interest rate because of differences in the Emre of the compounding of the bank account and that of te parents on the endorsement contract. Stavenie animate of the naminiwalue of Cavine contract is correct Related Question. The local car dealer creating Guin's endorsement opportunity can eam 6 (compounded quarterly) on his deposited funds. She would have to depoait each quarter start ng exactly two years before the day Cavina ha contrust to find her anderen en contract. Note: The future vulus intueat factor of es compounded quarterly for eight quarterly Wuta 8.4328.) 16. Application of Time Value of Money Skills Gavin Goldenarm has been playing baseball since he was five years old and has always dreamed of playing in the big leagues. Last season, he was a starting pitcher for a double-A (AA)-level baseball team, the Roswell Extraterrestrials; last year, he was the first runner-up for the Minor League Player of the Year award. Using his 97 mph fastball, an impeccable curve ball and slider, and a reliable changeup pitch, he achieved a 17-3 win-loss record, an earned run average (ERA) of 2.84, and 108 strikeouts in 123.1 innings pitched. He is also your best friend. Two weeks ago, on his three-year anniversary with the team, Gavin received the following email from his agent, Steven Sign'em- Now, indicating that he is being called up to the El Paso Grandies, the Extraterrestrials's corresponding Major League Baseball (MLB) team. Moreover, Gavin's contract is being revised to reflect his new status. The email describes the general terms and conditions of Gavin's revised contract. des From: Steven Sign'em-Now To: Gavin Goldenarm Subject: New Team, New Contract Proposal Gavin, Congratulations! You've been called up to the El Paso Grandies. Below are the offered terms and conditions of your new contract. After you review them and think about the offer, call me and we'll discuss your options. Congrats again! Salary and Incentives: . Gavin Goldenarm hereafter referred to as the "Player," is offered a four-year contract with an annual salary of $414,000 per year, to be paid at the end of each month in the contract term. . Under the league's collective bargaining agreement, the Player will receive a 4% cost-of-living adjustment (COLA) to his annual salary at the beginning of every other year. This means that the Player's annual salary will increase at the beginning of year 2 and year 4, as applicable In addition, the Player will receive a one-time $10,000 time-in- league bonus after six months of participation with an MLB team. This bonus will be paid immediately on completion of the six- month period. The Player is offered a performance-based bonus, as well as a milestone bonus. Both are intended to encourage outstanding performance. The Player is offered the following award-based performance incentive: a 15% bonus if he is designated as the Most Valuable Player (MVP) in the league. The Player is also offered the following milestone bonus: a $150,000 bonus if he ties Nolan Ryan's 1973 single-season strikeout record (383 strikeouts). The Player is eligible for each potential bonus each year that the contract is in effect and, if expressed as a percentage, will be based on the value of the Player's base annual salary for the corresponding year. If earned, the performance and milestone bonuses will be distributed in a single payment at the beginning of the next contract year. Although this proposal describes only one milestone, the actual contract contains several progressive milestones. Exceeding one milestone creates the opportunity to exceed another. In addition to the proposal offered by the Grandies, I've also been able to secure the following endorsement opportunity: A local car dealer has offered you a contract that will pay $750 per month for two years. This contract is contingent on your accepting the contract with the Grandies and will take effect immediately upon signing your MLB contract. In return for these payments, you will participate in the dealer's promotional events, such as signing autographs and allowing photographs as requested. I've also attached a worksheet that you can use to analyze the deal. I'm in negotiations for the rest of the day, so let's discuss your thoughts on the contract proposal tomorrow. I'm proud of you! Take care, Steven Steven Sign'em-Now Sports Agent, R&R Talent Management Inc. | El Paso Gavin is so excited! According to Steven, the contract is worth $2,544,400-assuming receipt of all possible bonuses. After rereading the email twice and calling his family, Gavin called you to review the terms of the contract and verify Steven's calculations. After an extended conversation about what he'll do with his newfound wealth, you and Gavin have agreed that any funds received could be invested to earn 8.00%, compounded monthly. Contract Evaluation Worksheet Complete the following worksheet by inserting the appropriate values to evaluate the contract and answer the related questions. Note: To clarify possible sources of confusion and simplify your calculations: Assume that all bonuses are earned in each of the years for which they are available and are paid at the end of the corresponding year(s), unless specifically stated differently. Their value should be based on the salary in effect at the time the bonuses were earned. The endorsement proceeds are paid in accordance with the terms of the deal. . Remember that the timing of a cash flow affects the interest rate that is used to discount the cash flow. For example, annual interest rates should be used to discount annual cash flovs, and monthly interest rates are used to discount monthly cash flows. Therefore, it may be necessary to compute the appropriate interest rate that should be used in a discounting calculation. . Round all dollar amounts to the nearest whole dollar and carry out all interest rate factors to four decimal places. When entering intermediate values as answer choices, be sure to round them to the nearest dollar, however when using those same values to calculate another answer, do not round. Gavin Goldenarm's Contract Evaluation Worksheet A B D E 1 Assumptions and Calculated Values 2 Bank Rate Information: 3 % Gavin's Bank Accoun Rate (compounded monthly) Monthly Bank Rate Effective Annual Interest Rate 4 % 5 % Year 1 Year 2 Year 3 Year 4 Total value Salary and Bonus Information: 8 9 10 Annual Salary (4% COLA) Monthly Salary Discount factor (based on Cell B4 above) Discounted Annual Salary 11.4958 10.6148 9.8013 9.0501 11 12 13 Time-in-League 14 0.9609 Bonus Discount factor (based on Cell B4 above) Discounted Time-in- League Bonus 16 17 Milestone Bonus 18 0.9234 0.8526 0.7873 0.7269 Discount factor (based on Cell BS above) Discounted Milestone Bonus 19 20 21 22 0.9234 0.8526 0.7873 0.7269 Performance Bonus Discount factor (based on Cell B5 above) Discounted Performance Bonus 23 24 25 26 11.4958 10.6148 Monthly Endorsement Contract Payment Discount factor (based on Cell B4 above) Discounted Monthly Endorsement Payment 27 28 29 Contract's Total Nominal Value Contract's Total Discounted Value 30 1. Given your worksheet calculations, which of the following statements is accurate? Is Steven's estimate of the value of Gavin's contract accurate on either a nominal or discounted basis? Check all that apply. Steven's estimate of the value of Gavin's contract is incorrect on a nominal basis, and the error is $46,938. It is appropriate and necessary to discount the endorsement contract using the bank account's effective annual interest rate because of differences in the timing of the compounding of the bank account and that of the payments on the endorsement contract. Steven's estimate of the nominal value of Gavin's contract is correct. Related Question: The local car dealer creating Gavin's endorsement opportunity can earn 5% (compounded quarterly) on his deposited funds. She would have to deposit each quarter, starting exactly two years before the day Gavin signs his contract, to fund her endorsement contract. [Note: The future value interest factor of 6% compounded quarterly for eight quarterly periods is 8.4328.]