Assume you have two options: Receive $10,000 six years from now or receive $11,000 seven years from now. Which would have a higher present value assuming a 5% discount rate? EXHIBIT 11B-1 Present Value of $1: Periods 4% 5% 6% 7% 8% 9% 10% 11% 12% 13% 2 3 0.962 0.952 0.943 0.935 0.926 0.917 0.909 0.901 0.893 0.885 0.925 0.907 0.890 0.873 0.857 0.842 0.826 0.812 0.797 0.783 0.889 0.864 0.840 0.816 0.794 0.772 0.751 0.731 0.712 0.693 0.855 0.823 0.792 0.763 0.735 0.708 0.683 0.659 0.636 0.613 0.822 0.784 0.747 0.713 0.681 0.650 0.621 0.593 0.567 0.543 0.790 0.746 0.705 0.666 0.630 0.596 0.564 0.535 0.507 0.480 0.760 0.711 0.665 0.623 0.583 0.547 0.513 0.482 0.452 0.425 0.731 0.677 0.627 0.582 0.540 0.502 0.467 0.434 0.404 0.376 0.703 0.645 0.592 0.544 0.500 0.460 0.424 0.391 0.361 0.333 0.676 0.614 0.558 0.508 0.463 0.422 0.386 0.352 0.322 0.295 7 8 9 EXHIBIT 11B-2 Present Value of an Annuity of $1 in Arrears EXHIBIT 11B-2 Present Value of an Annuity of $1 in Arrea Periods 4% 5% 6% 7% 8% 9% 10% 11% 12% 13% 1 0.962 1.886 2.775 3.630 4.452 5.242 6.002 6.733 7.435 8.111 0.952 0.943 0.935 1.859 1.833 1.808 2.723 2.673 2.624 3.546 3.465 3.387 4.329 4.212 4.100 5.076 4.917 4.767 5.786 5.582 5.389 6.463 6.210 5.971 7.108 6.802 6.515 7.722 7.360 7.024 0.926 1.783 2.577 3.312 3.993 4.623 5.206 5.747 6.247 6.710 0.917 0.909 0.901 0.893 0.885 1.759 1.736 1.713 1.690 1.668 2.531 2.487 2.444 2.402 2.361 3.240 3.170 3.102 3.037 2.974 3.890 3.791 3.696 3.605 3.517 4.486 4.355 4.231 4.111 3.998 5.033 4.868 4.712 4.564 4.423 5.535 5.335 5.146 4.968 4.799 5.995 5.759 5.537 5.328 5.132 6.418 6.145 5.889 5.650 5.426 10 O $10,000 six years from now O $11,000 seven years from now