A brilliant young scientist is killed in a plane crash. It is anticipated that he could have earned $360,000 a year for the next 30 years. The attorney for the plaintiff's estate argues that the lost income should be discounted back to the present at 4 percent. The lawyer for the defendant's insurance company argues for a discount rate of 10 percent. What is the difference between the present value of the settlement at 4 percent and 10 percent? Compute each one separately. Use Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Present Value PVlat 4% rate PV at 10% rate $ 0.00 Difference es Appendix D Present value of an annuity of $1, PVIFA PVA 1 - 1 (1 + 1)" Percent 8% 9% 10% 12% 11% 7% 3% 4% 5% 6% 2% Period 1% 0.909 0.901 0.926 0.935 0.943 0.893 1.690 0.962 0.980 0.952 1.859 0.971 1.913 1.713 1.808 1.886 1.783 2.577 0.917 1.759 2.531 3.240 2 2.444 1.736 2.487 3.170 1.833 2.673 3.465 2.829 2.775 2.723 2.624 3.387 3 3.312 1.942 2.884 3.808 4.713 5.601 3.102 3.696 3.717 3.546 3.630 3.791 2.402 3.037 3.605 4.111 4.564 4.452 4.580 4.212 4.329 4.100 4.767 3.890 4.486 5 4.231 3.993 4.623 5.206 4.355 4.917 5.076 5.417 4.868 4.712 5.389 0.990 1.970 2.941 3.902 4.853 5.795 6.728 7.652 8.566 9.471 10.368 11 255 12.134 6.472 5.786 6.230 5.242 6.002 6.733 7.435 5.335 5.033 5.535 5.995 5.146 4.968 7.020 5.582 6.210 6.802 6.463 5.747 6.247 5.971 6.515 5.759 5.328 5.537 5.889 7.108 7.786 7.722 7.360 7.024 7.499 8.111 8.760 6.710 7.139 6.418 6.805 6.145 6.495 6 6.207 8.306 7.887 8.530 9.253 9.954 10.635 7.161 7.943 8.863 7.536 7.904 8.384 8.853 9.385 9.986 6.814 7.103 5.650 5.938 6.194 6.424 6.628 6.811 6.492 6.750 12 7.487 9.394 8.358 13 6.982 8.745 7.786 8.244 10.563 7.367 7.606 9.295 9.712 7.191 8.061 9.108 9.899 10.380 10.838 11.296 11.938 12.561 11.118 8.559 8.851 15 7.824 8.313 9.447 11,652 7.325 8.162 8.983 9.787 10.575 11.348 12.106 12.849 13.578 14.292 14.992 15.678 16.351 19.523 22.396 27.355 31.424 10.106 10.477 8.544 9.122 8.022 7.379 7.549 7.702 11.274 12.166 12.659 10.828 11.690 9.763 10.059 10.336 8.201 8.756 13.166 13.754 14.324 14.877 9.372 9.604 18 8.365 8.950 13.004 13.865 14.718 15.562 16.398 17.226 18.046 22.023 25,808 32.835 39.196 6.974 7.120 7.250 7.366 7.469 7.843 8.055 12.085 13.134 19 12.462 10.594 8.514 9.129 7.839 7.963 8.422 8.694 9.818 10.675 11.158 11.470 12.783 13.765 20 25 14.094 17413 19.600 13.590 15.622 17 292 19.793 21.482 9.077 9.427 11.654 12.409 15.3 72 9.823 10.274 10.757 10.962 11.258 11.925 30 8.951 8.244 17.159 15.046 13.332 23.115 25.730 9.779 9.915 9.042 8.304 18.256 15.762 13.801 12.233 50 Percent 30% 35% 20% 25% 40% 19% 50% 13% Period 15% 16% 18% 14% 17% 0.741 0.714 0.840 0.769 0.885 0.862 0.667 0.833 0.870 0.855 1 0.877 1.647 0.847 1.566 0.800 1.440 1.861 1.289 1.224 1.547 1.528 1.668 1.626 2. 1.605 1.585 1.696 1.589 2.283 2.106 1.952 1.407 2.246 2.174 1.8 16 2.210 3 2.361 2.974 2.322 2.914 2.140 2.639 1.997 1.849 2.855 2.798 2.589 2.166 1.605 2.743 2.362 2.690 2.436 2.220 2.035 2.991 5 3.274 3.199 3.127 3.517 3.998 3.433 3.889 3.352 3.784 2.689 2.951 1.737 1.824 2.385 2.168 6 3.685 3.589 3.326 2.643 3.498 2.263 2.508 4.423 7 3.812 1.883 3.161 4.160 3.922 4.288 4.639 4.039 4.344 3.058 3.410 3.706 3.954 4.163 4.339 3.605 3.837 2.802 2.925 1.922 2.331 4.799 8 4.487 3.329 2.598 4.207 4.078 5.132 4.946 9 2.379 4.772 4.607 4.451 4.031 3.463 2.665 4.303 4.494 3.019 3.092 1.948 1.965 5.426 5.216 10 5.019 4.833 4.659 4.192 3.571 2.715 2.414 5.453 11 5.234 4.836 4.656 4.486 4.327 3.147 2.752 2.438 1.977 5.687 5.918 5.029 5.197 3.656 3.725 12 5.660 5.421 4.988 4,793 4.611 4.439 3.190 2.779 2.456 1.985 13 6.122 5.842 5.583 5.342 5.118 4.910 4.715 4.533 3.780 3.223 2.799 2.469 1.990 14 6,002 5.468 5.008 4.802 4.611 3.824 3.249 1.993 6.302 6.462 5.724 5.847 5.229 5.324 2 814 2.825 2,478 2.484 15 6.142 5.575 5.092 4.876 4.675 3.859 3.268 1.995 16 6.604 6.265 5.954 5.668 3.887 3.283 2.834 2.489 1.997 5.405 5.475 5.162 5.222 4.938 4.988 4.730 4.775 17 6.729 6.373 6.047 5.749 3.910 3.295 2.840 2.492 1.998 18 6.840 6.128 5.818 5.534 5.273 5.033 4.812 3.928 3.304 2.844 2.494 1.999 6.467 6.550 19 6.938 6.198 5.877 5.584 5.316 3.942 3.311 2.848 2.496 1.999 5.070 5.101 20 7.025 6.623 6.259 5.628 5.353 4.843 4.870 4.948 3.954 3.316 5.929 6.097 2.497 2.850 2.856 1.999 2.000 25 7.330 6.873 6,464 5.766 5.467 5.195 3.985 3.329 2.499 30 7.496 6.566 5.829 5.517 5.235 4.979 3.995 3.332 2.857 2.500 2.000 7.003 7.105 6.177 6.233 40 7.634 6.642 5.871 5.548 5.258 4.997 3.333 2.000 3.999 4.000 2.857 2.857 2.500 2.500 50 7.675 7.133 6.661 6.246 5.880 5.554 5.262 4.999 3.333 2.000