Exercise 14A-3 (Algo) Basic Present Value Concepts [LO14-7] In three years, when he is discharged from the Air Force, Steve wants to buy a $18,000 power boat. Click here to view Exhibit 148-1 and Exhibit 148-2, to determine the appropriate discount factor(s) using tables. Required: What lump-sum amount must Steve invest now to have the $18,000 at the end of three years if he can invest money at: (Round your final answer to the nearest whole dollar amount.) 1. Six percent 2. Ten percent Present Value IBIT 148-1 Present Value of $1; 1 (1+7) Periods 4% 5% 6% 7% 85 9% 10% 11% 12% 1 0.962 0.952 0.943 0.935 0.926 0.917 0.909 0.901 2 0.925 0.907 0890 0.873 0.857 0842 0.826 3 0.889 0.864 0.840 0.816 0.794 0.772 0.751 4 0.855 0.823 0.792 0.763 0.735 0.708 0.683 5 0.822 0.784 6 0.621 0630 0.596 0.564 7 8 9 0.703 0.645 0.592 10 0.676 0.614 0.558 11 12 0.625 0557 0.497 0.444 0.397 13 0.601 0.530 0.469 0415 0.368 14 15 0.555 0.481 0417 16 0534 0.458 0.394 0.362 0.339 0.292 0252 17 0513 0436 0371 0.317 0.270 0.231 18 0.494 0416 0.350 0.296 0.250 0.212 19 0.475 0.396 0.331 0.277 20 0456 0.377 0312 21 0.439 0359 0.294 0.242 22 0232 0.194 0.215 0.178 0.149 0.199 0.164 0.135 0422 0.342 0.278 0.226 0.184 0.150 0.123 0.258 23 0406 0.326 0.262 0.211 0.170 0.138 0.112 24 0.390 0310 25 0375 0.295 26 0.361 27 13% 14% 15% 22% 16% 17% 18% 24% 19% 20% 21% 23% 0.893 0.885 0.877 0.870 0.862 0.855 0.847 0.840 0.833 0.806 0.800 0826 0820 0813 0812 0.797 0.783 0.769 0.756 0.743 0.731 0.718 0.706 0.694 0.683 0.672 0.661 0.650 0.640 0.731 0.712 0693 0.675 0.658 0.551 0.641 0.624 0.609 0.593 0.579 0.564 0537 0.524 0.512) 0.659 0451 0.636 0.613 0392 0.572 0.552 0.534 0516 0.499 0482 0.467 0437 0423 0.410. 0.747 0.328 0.713 0.681 0.650 0.593 0.386 0.370 0.355 0.341 0.567 0.543 0.519 0497 0476 0456 0402 0437 0419 0.666 0.535 0.790 0.746 0.705 0.507 0.303 0.289 0.275 0.262 0.480 0.319 0.456 0432 0410 0.390 0370 0352 0.335 0,760 0.711 0.222 0.210 0.665 0.623 0.583 0.547 0.513 0482 0.452 0.425 0.400 0.376 0.354 0333 0314 0.296 0.279 0.263 0.249 0.235 0.731 0.677 0.627 0.582 0.540 0.502 0.467 0434 0.404 0376 0.351 0327 0.305 0.285 0.266 0.249 0.233 0.218 0.204 0.191 0.179 0.168 0544 0.500 0.460 0.424 0.391 0.361 0.333 0.308 0.284 0.263 0.243 0.225 0.209 0.194 0.180 0.167 0.155 0.144 0.134 0.508 0.463 0422 0.386 0.352 0322 0.295 0.270 0.247 0.227 0.208 0.191 0.176 0.162 0.149 0.137 0.126 0.116 0.107 0.650 0.585 0.527 0.475 0.429 0.388 0.350 0.317 0.287 0.261 0.237 0.215 0.195 0.178 0.162 0.148 0.135 0.123 0.112 0.103 0.094 0.086 0.356 0319 0.286 0.257 0.231 0.208 0.187 0.168 0.152 0.137 0.124 0.112 0.102 0.092 0.083 0.076 0.069 0.326 0.290 0.258 0.229 0.204 0.182 0.084 0.075 0.068 0.061 0.163 0.145 0.130 0.116 0.104 0.093 0577 0.505 0442 0.388 0.340 0.299 0.263 0.232 0.205 0.181 0.160 0.141 0.125 0.111 0.099 0.088 | 0.078 | 0.069 0.062 0.055 0.049 0.045 0.040 0315 0.275 0.095 0.084 0.074 0.065 0.057 0.051 0.239 0.209 0.183 0.160 0.140 0.123 0.108 0218 0.188 0.163 0.141 0.123 0.107 0.071 0.062 0.054 0.047 0.081 0.093 0.198 0.170 0.146 0.125 0.108 0.069 0.060 0.052 0.045 0.039 0.180 0.153 0.130 0.111 0095 0023 0.164 0.138 0.116 0.098 0083 0.070 0.043 0037 0.031 0.027 0.060 0051 0.124 0.104 0.087 0.073 0.061 0.051 0.043 0037 0.019 0.016 0.031 0.022 0.015 0.013 0.112 0.093 0.077 0.064 0.037 0.031 0.026 0.022 0.018 0.053 0.044 0.018 0.015 0.013 0.011 0.009 0.007 0.068 0.056 0.046 0.101 0.032 0.026 0.022 0.038 0.074 0.060 0.049 0040 0.033 0.027 0.015 0.091 0.012 0.022 0.018 0010 0.009 0.082 0.066 0247 0.197 0.158 0.126 0.102 0013 0.010 0.053 0.043 0035 0.008 0.007 0.028 0.023 0.019 0015 0.010 0.007 0.006 0.005 0.009 0.233 0.184 0.146 0.116 0.092 0020 0.016 0.013 0.074 0.059 0038 0.030 0047 0.024 0.009 0.021 0.011 0.007 0.106 0.084 0.066 0053 0.017 0.281 0.220 0.172 0.135 0042 0.033 0026 0.014 0.014 0.011 0.007 0.006 0005 0.004 0.029 0.023 0.018 0347 0.268 0.207 0.161 0.125 0.098 0076 0050 0.047 0.037 28 0333 0.255 0.19 0.150 0.116 0.090 0.069 0.054 0.042 0.013 0.026 0.020 0.016 0.012 0.010 0.008 25% 0055 0.044 0.035 0042 0.036 0.032 0.028 0.093 0.080 0.034 0.030 0.026 0.023 0.081 0.069 0.059 0.051 0.044 0.038 0.032 0.028 0.024 0.021 0.018 0.020 0.017 0.014 0.026 0.014 0.012 0.011 0.009 0.007 0.006 0.006 0.005 0.004 0006 0.005 0.004 0.003 0.009 0003 0.002 0.006 0.005 0.004 0.003 0002 0.002 Present Value of an Annuity of $1 in Arrears (+) 5.033 5.535 5.995 2487 4% 5% 6% 7% 8% 9% 10% 11% 12% 13% 14% 15% 16% 17% 18% 19% 20% 21% 22% 23% 24% 25% 0.962 0.952 0.943 0.935 0.926 0.917 0.909 0.901 0.893 0.885 0.877 0.870 0.862 0.855 0.847 0.840 0.833 0.826 0.820 0.813 0.806 0.800 1.886 1.859 1.833 1.808 1.783 1.759 1.736 1.713 1690 1668 1.647 1626. 1.605 1.585 1566 1.547 1.528 1.509 1492 1474 1457 1440 2.673 2.624 2.577 2.331 2.444 2.402 2.361 2.322 2.283 2.246 2.210 2.174 2.140 2.106 2074 2042 2011 1.981 1952 3.387 3312 3.240 3.170 3.102 3.037 2.974 2.914 2.855 2.798 2.743 2.690 2.39 2.589 2.540 2.494 2.448 2.404 2.362 4.452 4.329 4.212 4.100 3.993 3.890 3.791 3.696 3.605 3.517 3.433 3.352 3.274 3.199 3.127 3.058 2.991 2.926 2.864 2.803 2.745 2.689 5.242 5.076 4.917 4,767 4.623 4.486 4.355 4.231 4.111 3.998 3.889 3.784 3.685 3.589 3.498 3.410 3326 3.245 3.167 3.092 3.020 2.951 4.868 4.712 4.564 4423 4.288 4.160 | 4.039 3.922 3.812 3.706 3.605 3.508 3.416 3.327 3.242 3.161 5335 5.146 4.968 4.799 4.639 4.487 4.344 4.207 4.078 3.954 3.837 3.726 3.619 3518 3421 3.329 5.759 5.537 5.328 5.132 4.946 4.772 4.607 4.451 4.303 4.163 4.031 3.905 3.786 3.673 3.566 3463 6.710 6418 6.145 5.889 5.650 5.426 5216 5.019 4833 4.659 4.494 4.339 4.192 4.054 3.923 3.799 3.682 3.571 7.139 6.805 6.495 6.207 5.938 5.687 5.453 5.234 5029 4.836 4.656 4.486 4.327 4.177 4.035 3.902 3.776 3.656 7.536 | 7.161 6814 6492 6.194 5.918 5.660 5.421 5.197 4.988 4,793 4.611 4439 4278 4.127 3.985 3.851 3.725 7.904 7.487 7,103 6.750 6.424 6.122 5.842 5.583 5.342 5.118 4.910 4.715 4.533 4.362 4.203 4053 3.912 3.780 8.244 7.786 7.367 6.982 6.628 6.302 6.002 5.724 5.468 5.229 5008 4.802 4.611 4.432 4.265 4.108 3.962 3.824 8.559 8.061 7.606 7.191 6.811 6.462 6.142 5.847 5575 5.324 5092 4.876 4.675 4489 4.315 4.153 4.001 3.859 8.851 8.313 7.824 7.379 6.974 6.604 6.265 5.954 5.668 5.405 5.162 4938 4.730 4.536 4.357 4.189 4.033 3.887 9.122 8544 8.022 7.549 7.120 6.729 6373 6.047 5.749 5.475 5.222 4.990 4.775 4576 4.391 4.219 4.059 3.910 12.659 11.690 10.828 10.059 9.372 8.756 8.201 7.702 7.250 6.840 6.467 6.128 5.818 5.534 5.273 5033 4.812 4.608 4419 4.243 4.080 3.928 13.134 12.085 11.158 10.336 9.604 8.950 8.365 7.839 7.366 6.938 6.550 6.198 5877 5.584 5316 5070 4843 4.635 4.442 4.263 4.097 3.942 13.3590 12.462 11.470 10.594 9.818 9.129 8314 7.963 7.469 7.025 6.623 6.259 5.929 5.628 5.353 5.101 4.370 4.657 4.460 4279 4.110 3.954 14.029 12.821 11.764 10.836 10.017 9.292 8.649 8.075 7.562 7.102 6.687 6.312 5.973 5.665 5.384 5.127 4.891 4.675 4476 4.292 4.121 3.963 Periods 1 2 3 2.775 2.723 4 3.630 3546 3465 5 6 7 6.002 5.786 | 5.582 | 5.389 15.206. 8 6.733 9 6.463 6.210 5971 5.747 7435 7.108 6.802 6515 6.247 10 8.111 7.722 7.360 7024 11 8.760 8.306 7.887 7.499 12 9.385 8.863 8.384 13 9.986 14 15 7.943 9.394 8.853 8.358 10.563 9.899 9.295 8.745 11.118 10.380 9.712 9.108 16 11.652 10.838 10.106 9447 17 12.166 11.274 10.477 9.763 18 19 20 21 22 23 24 25 26 27 28 14.451 13.163 12.042 11.061 10.201 9442 8.772 8.176 7.645 7.170 6.743 6.359 6011 5.696 5410 5.149 4.909 4.690 4.488 4.302 4.130 3.970 14.857 13.489 12.303 11.272 10.371 9.580 8883 8.266 7718 7.230 6.792 6.399 6.044 5.723 5432 5.167 4.925 4.703 4499 4.311 4.337 3.976 15.247 13.799 12.550 11.469 10.529 9.707 8985 8.348 7.784 7.283 6835 6434 6.073 5.746 5451 5.182 4937 4.713 4507 4.318 4.143 3.981 15.622 14.094 12.783 11.654 10.675 9.823 9.077 8422 7.843 7.330 6873 6464 6.097 5.766 5.467 5.195 4.948 4.721 4514 4323 4.147 3.985 15.983 14.375 13.003 11.826 10.810 9.929 9.161 8488 7.896 7.372 6.906 6.491 6.118 5.783 5.480 5.206 4.956 4.728 4.520 4328 4.151 3.988 16.330 14.643 13.211 11.987 10.935 10.027 9.237 8548 7.943 7.409 6.935 6.514 6.136 5.798 5492 5.215 4.964 4.734 4.524 4.332 4.154 3990 16.063 14.898 13406 12.137 11.051 10.116 9.307 8602 7984 7441 6.961 6534 6.152 5810 5502 5223 4970 4.739 4.528 4.335 4.157 3992 16.984 15.141 13.591 12.278 11.158 10.1989.320 8650 8022 7420 6.983 6.551 6.166 5820 5510 5229 4975 4.741 4531 4337 4.159 3.994