Assume you make the following investments: a. You invest a lump sum of $8,750 for five years at 14% interest. What is the investment's value at the end of five years? b. In a different account earning 14% interest, you invest $1,750 at the end of each year for five years. What is the investment's value at the end of five years? C. (Click the icon to view the future value factor table.) factor table.) (Click the icon to view the present value factor table.) factor table.) What general rule of thumb explains the difference in the investments' future values? (Click the icon to view the future value annuity (Click the icon to view the present value annuity a. You invest a lump sum of $8,750 for five years at 14% interest. What is the investment's value at the end of five years? (Round your answer to the nearest whole dollar.) Investment's value = Reference Future Value of $1 Periods 1% 2% 3% 4% 5% 6% 8% 10% 12% 14% 16% Period 1 1.010 1.020 1.030 1.040 1.050 1.060 1.080 1.100 1.120 1.140 1.160 Period 2 1.020 1.040 1.061 1.082 1.103 1.124 1.166 1.210 1.254 1.300 1.346 Period 3 1.030 1.061 1.093 1.125 1.158 1.191 1.260 1.331 1.405 1.482 1.561 Period 4 Period 5 1.051 1.041 1.082 1.126 1.170 1.104 1.159 1.217 1.216 1.262 1.360 1.464 1.574 1.689 1.811 1.276 1.338 1.469 1.611 1.762 1.925 2.100 Period 6 1.062 1.126 1.194 1.265 Period 7 1.072 1.149 1.230 1.316 Period 8 1.083 1.172 1.267 1.369 1.477 1.594 Period 9 1.094 1.195 1.305 1.423 1.551 1.689 Period 10 1.105 1.219 1.344 1.480 1.629 1.340 1.419 1.587 1.772 1.407 1.504 1.714 1.949 1.851 2.144 2.476 1.999 1.791 2.159 1.974 2.195 2.436 2.211 2.502 2.826 2.853 3.278 2.358 2.773 3.252 3.803 2.594 3.106 3.707 4.411 Period 11 1.116 1.243 1.384 1.539 1.710 1.898 2.332 2.853 3.479 4.226 5.117 Period 12 1.127 1.268 1.426 1.601 1.796 2.012 2.518 3.138 3.896 4.818 5.936 Period 13 1.138 1.294 1.469 1.665 1.886 2.133 2.720 3.452 4.363 5.492 6.886 Period 14 1.149 1.319 1.513 1.732 1.980 2.261 2.937 3.797 4.887 6.261 7.988 Period 15 1.161 1.346 1.558 1.801 2.079 2.397 3.172 4.177 5.474 7.138 9.266 Period 20 1.220 1.486 1.806 2.191 2.653 3.207 4.661 6.727 9.646 13.743 19.461 Period 25 1.282 Period 30 Period 40 1.641 2.094 2.666 3.386 4.292 6.848 10.835 17.000 26.462 40.874 1.348 1.811 2.427 3.243 4.322 1.489 2.208 3.262 4.801 7.040 5.743 10.063 17.449 29.960 50.950 85.850 1 10.286 21.725 45.259 93.051 188.884 378.721 7 Future Value of Annuity of $1 Periods Period 1 1% 2% 3% 4% 1.000 1.000 1.000 1.000 5% 6% 1.000 1.000 8% 10% 12% 14% 16% 1.000 1.000 1.000 1.000 1.000 Period 2 2.010 2.020 2.030 2.040 2.050 Period 3 3.030 3.060 3.091 3.122 2.060 3.153 3.184 3.246 3.310 3.374 2.080 2.100 2.120 2.140 2.160 3.440 3.506 Period 4 4.060 4.122 4.184 4.246 4.310 4.375 4.506 4.641 4.779 4.921 5.066 Period 5 5.101 5.204 5.309 5.416 5.526 5.637 5.867 6.105 6.353 6.610 6.877 Period 6 6.152 6.308 6.468 Period 7 7.214 8.286 6.633 6.802 6.975 7.336 7.716 8.115 7.434 7.662 7.898 8.142 8.394 8.923 9.487 10.089 Period 8 8.583 8.892 9.214 9.549 9.897 10.637 11.436 12.300 9.369 Period 9 9.755 10.159 10.583 11.027 11.491 12.488 13.579 14.776 Period 10 10.462 10.950 11.464 12.006 12.578 13.181 14.487 15.937 17.549 Period 11 11.567 12.169 12.808 13.486 14.207 14.972 16.645 18.531 20.655 12.683 13.412 14.192 15.026 15.917 16.870 18.977 21.384 24.133 Period 12 13.809 14.680 15.618 16.627 17.713 18.882 21.495 24.523 28.029 Period 13 Period 14 14.947 15.974 17.086 18.292 19.599 21.015 24.215 27.975 32.393 Period 15 16.097 17.293 18.599 20.024 21.579 23.276 27.152 31.772 37.280 91,025 Period 20 22.019 24.297 26.870 29.778 33.066 36.786 45.762 57.275 72.052 249.21 Period 25 28.243 32.030 36.459 41.646 47.727 54.865 73.106 98.347 133.334 181.871 530.31 Period 30 34.785 40.568 47.575 56.085 66.439 79.058 113.283 164.494 241.333 356.787 Period 40 48.886 60.402 75.401 95.026 120.800 154.762 259.057 442.593 767.091 1,342.025 2,360.7 37.581 43.842 51.66 115.38 8.536 8.977 10.730 11.41 13.233 14.24 16.085 17.51 19.337 21.32 23.045 25.73 27.271 30.85 32.089 36.78 43.67 Present Value of $1 Periods 1% 2% 3% Period 1 0.990 0.980 0.971 Period 2 0.980 4% 0.962 0.961 0.943 0.925 Period 3 0.971 0.942 0.915 0.889 0.864 5% 6% 8% 10% 12% 14% 16% 18% 0.952 0.943 0.926 0.909 0.893 0.877 0.862 0.847 0.907 0.890 0.857 0.826 0.797 0.769 0.743 0.718 0.840 0.794 0.751 0.712 0.675 0.641 0.609 Period 4 0.961 0.924 0.888 0.855 0.823 0.792 0.735 0.683 0.636 0.592 0.552 0.516 Period 5 0.951 0.906 0.863 0.822 0.784 0.747 0.681 0.621 0.567 0.519 0.476 0.437 Period 6 0.942 0.837 Period 7 0.933 0.871 0.813 0.923 Period 8 0.853 0.789 Period 9 0.837 0.766 0.914 Period 10 0.905 0.888 0.790 0.746 0.705 0.820 0.744 0.630 0.564 0.507 0.760 0.711 0.665 0.583 0.513 0.452 0.731 0.677 0.627 0.540 0.467 0.703 0.645 0.592 0.500 0.424 0.676 0.614 0.558 0.463 0.456 0.410 0.370 0.400 0.354 0.314 0.404 0.351 0.305 0.266 0.361 0.308 0.263 0.225 0.386 0.322 0.270 0.227 0.191 Period 11 Period 12 0.896 0.804 0.722 0.650 0.585 0.527 0.429 0.350 0.287 0.237 0.195 0.162 0.887 0.788 0.701 0.625 0.557 0.497 0.397 0.319 0.257 0.208 0.168 0.137 Period 13 0.879 0.773 0.681 0.601 0.530 0.469 0.368 0.290 0.229 0.182 0.145 0.116 d Period 14 0.870 0.758 0.661 Period 15 0.861 0.743 0.642 0.577 0.505 0.442 0.555 0.340 0.263 0.205 0.160 0.125 0.099 0.481 0.417 0.315 0.239 0.183 0.140 0.108 0.084 n Period 20 0.820 0.673 0.554 0.456 Period 25 0.780 0.610 0.478 0.375 0.377 0.312 0.295 0.233 Period 30 0.742 Period 40 0.672 0.552 0.412 0.308 0.453 0.307 0.208 0.231 0.174 0.142 0.215 0.149 0.104 0.073 0.051 0.037 0.146 0.092 0.059 0.038 0.024 0.016 0.057 0.033 0.020 0.012 0.007 0.099 0.097 0.046 0.022 0.011 0.005 0.003 0.001 Present Value of Annuity of $1 Periods 1% Period 1 0.990 Period 2 1.970 Period 3 2.941 Period 4 3.902 Period 5 4.853 Period 6 5.795 Period 7 6.728 Period 8 7.652 Period 9 8.566 Period 10 9.471 2% 3% 4% 5% 6% 8% 10% 12% 0.980 0.971 0.962 0.952 0.943 0.926 0.909 0.893 1.942 1.913 1.886 1.859 1.833 1.783 1.736 1.690 2.884 2.829 2.775 2.723 2.673 2.577 2.487 2.402 3.808 3.717 3.630 3.546 3.465 3.312 3.170 3.037 4.713 4.580 4.452 4.329 4.212 3.993 3.791 3.605 5.601 5.417 5.242 5.076 4.917 4.623 4.355 4.111 6.472 6.230 6.002 5.786 5.582 5.206 4.868 4.564 7.325 7.020 6.733 6.463 6.210 5.747 5.335 4.968 8.162 7.786 7.435 8.983 8.530 8.111 Period 11 10.368 9.787 9.253 8.760 Period 12 11.255 10.575 9.954 9.385 Period 13 12.134 11.348 10.635 9.986 9.394 8.853 7.904 7.103 6.424 Period 14 13.004 12.106 11.296 10.563 9.899 9.295 8.244 7.367 6.628 Period 15 13.865 12.849 11.938 11.118 10.380 9.712 8.559 7.606 6.811 Period 20 18.046 16.351 14.877 13.590 12.462 11.470 9.818 8.514 7.469 Period 25 22.023 19.523 17.413 15.622 14.094 12.783 10.675 9.077 7.843 6.873 Period 30 25.808 22.396 19.600 17.292 15.372 13.765 11.258 9.427 8.055 7.003 Period 40 32.835 27.355 23.115 19.793 17.159 15.046 11.925 9.779 8.244 7.105 14% 16% 18% 0.877 0.862 0.847 1.647 1.605 1.566 2.322 2.246 2.174 2.914 2.798 2.690 3.433 3.274 3.127 3.889 3.685 3.498 4.288 4.039 3.812 4.639 4.344 4.078 7.108 6.802 6.247 5.759 5.328 4.946 4.607 4.303 7.722 7.360 6.710 6.145 5.650 5.216 4.833 4.494 8.306 7.887 7.139 6.495 5.938 5.453 5.029 4.656 8.863 8.384 7.536 6.814 6.194 5.660 5.197 4.793 5.842 5.342 4.910 6.002 5.468 5.008 6.142 5.575 5.092 6.623 5.929 5.353 6.097 6.177 6.233 5.548 5.467 5.517