Assume Ellina earns a 8 percent after-tax rate of return and that she owes a friend $1,900. ... Wuld she prefer to pay the friend $1,900 today or $2,565 in four years? Use Exhibit 3.1: EXHIBIT 3-1 Present Value of a Single Payment at Various Annual Rates of Return \begin{tabular}{|l|c|c|c|c|c|c|c|c|c|} \hline & 4% & 5% & 6% & 7% & 8% & 9% & 10% & 11% & 12% \\ \hline Year 1 & 0.962 & 0.952 & 0.943 & 0.935 & 0.926 & 0.917 & 0.909 & 0.901 & 0.893 \\ \hline Year 2 & 0.925 & 0.907 & 0.890 & 0.873 & 0.857 & 0.842 & 0.826 & 0.812 & 0.797 \\ \hline Year 3 & 0.889 & 0.864 & 0.840 & 0.816 & 0.794 & 0.772 & 0.751 & 0.731 & 0.712 \\ \hline Year 4 & 0.855 & 0.823 & 0.792 & 0.763 & 0.735 & 0.708 & 0.683 & 0.659 & 0.636 \\ \hline Year 5 & 0.822 & 0.784 & 0.747 & 0.713 & 0.681 & 0.650 & 0.621 & 0.593 & 0.567 \\ \hline Year 6 & 0.790 & 0.746 & 0.705 & 0.666 & 0.630 & 0.596 & 0.564 & 0.535 & 0.507 \\ \hline Year 7 & 0.760 & 0.711 & 0.665 & 0.623 & 0.583 & 0.547 & 0.513 & 0.482 & 0.452 \\ \hline Year 8 & 0.731 & 0.677 & 0.627 & 0.582 & 0.540 & 0.502 & 0.467 & 0.434 & 0.404 \\ \hline Year 9 & 0.703 & 0.645 & 0.592 & 0.544 & 0.500 & 0.460 & 0.424 & 0.391 & 0.361 \\ \hline Year 10 & 0.676 & 0.614 & 0.558 & 0.508 & 0.463 & 0.422 & 0.386 & 0.352 & 0.322 \\ \hline Year 11 & 0.650 & 0.585 & 0.527 & 0.475 & 0.429 & 0.388 & 0.350 & 0.317 & 0.287 \\ \hline Year 12 & 0.625 & 0.557 & 0.497 & 0.444 & 0.397 & 0.356 & 0.319 & 0.286 & 0.257 \\ \hline Year 13 & 0.601 & 0.530 & 0.469 & 0.415 & 0.368 & 0.326 & 0.290 & 0.258 & 0.229 \\ \hline Year 14 & 0.577 & 0.505 & 0.442 & 0.388 & 0.340 & 0.299 & 0.263 & 0.232 & 0.205 \\ \hline Year 15 & 0.555 & 0.481 & 0.417 & 0.362 & 0.315 & 0.275 & 0.239 & 0.209 & 0.183 \\ \hline \end{tabular}