Interest Factors for the Future Value of an Annuity of One Dollar 1% 8% Time Period (e.g. year) 1 2 3 4 5 1.000 2.010 3.030 4.060 5.101 2% 1.000 2.020 3.060 4.122 5.204 3% 1.000 2.030 3.091 4.184 5.309 4% 1.000 2.040 3.122 4.246 5.416 5% 1.000 2.050 3.152 4.310 5.526 6% 1.000 2.060 3.184 4.375 5.637 7% 1.000 2.070 3.215 4.440 5.751 1.000 2.080 3.246 4.506 5.867 9% 1.000 2.090 3.278 4.573 5.985 10% 1.000 2.100 3.310 4.641 6.105 12% 1.000 2.120 3.374 4.770 6.353 14% 1.000 2.140 3.440 4.921 6.610 16% 1.000 2.160 3.506 5.067 6.877 20% 1.000 2.200 3.640 5.368 7.442 6 7 8 9 10 6.152 7.214 8.286 9.369 10.462 6.308 6.468 7.434 7.662 8.583 8.892 9.755 10.159 10.950 11.464 6.633 6.802 7.898 8.142 9.214 9.549 10.583 11.027 12.006 12.578 6.975 8.394 9.897 11.491 13.181 7.153 8.654 10.260 11.978 13.816 7.336 7.523 8.923 9.200 10.637 11.028 12.488 13.021 14.487 15.193 7.716 9.487 11.436 13.579 15.937 8.115 10.089 12.300 14.776 17.549 8.536 10.730 13.233 16.085 19.337 8.978 9.930 11.413 12.915 14.240 16.499 17.518 20.798 21.321 25.958 11 12 13 14 15 11.567 12.683 13.809 14.947 16.097 12.169 13.412 14.680 15.974 17.293 12.808 13.486 14.207 14.192 15.026 15.917 15.618 16.627 17.713 17.086 18.292 19.599 18.599 20.024 21.579 14.972 16.870 18.882 21.051 23.276 15.784 17.888 20.141 22.550 25.129 16.645 17.560 18.977 20.141 21.495 22.953 24.215 26.019 27.152 29.361 18.531 21.384 24.523 27.975 31.772 20.655 24.138 28.029 32.393 37.280 23.044 27.271 32.089 37.581 43.842 25.732 32.150 30.850 39.580 36.786 48.496 43.672 59.195 51.65972.035 16 17 18 19 17.258 18.430 19.615 20.811 22.019 18.639 20.012 21.412 22.841 24.297 20.157 21.762 23.414 25.117 26.870 21.825 23.698 25.645 27.671 29.778 23.657 25.840 28.132 30.539 33.066 25.673 28.213 30.906 33.760 36.786 27.888 30.324 30.840 33.750 33.999 37.450 37.379 41.446 40.995 45.762 33.003 36.974 41.301 46.018 51.160 35.950 40.545 45.599 51.159 57.275 42.753 48.884 55.750 63.440 72.052 50.980 59.118 68.934 78.969 91.025 60.925 87.442 71.673 105.93 84.140 128.11 98.603 154.74 115.370 186.68 20 25 28.243 32.030 36.459 41.646 47.727 54.865 63.249 73.106 84.701 98.347 133.33 181.87 249.210 471.98 30 34.785 40.568 47.575 56.085 66.439 79.058 94.461 113.283 136.308 164.494 241.333 356.878 530.310 1181.8 You are offered $1,100 after six years (Offer 1) or $150 a year for six years (Offer 2). If you can earn 5 percent on your funds, calculate the future values of both payments. Use Appendix C to answer the question. Round your answers to the nearest dollar. FV (Offer 1): $ FV (Offer 2): $ Which offer will you accept? Offer 1 4 If you can earn 14 percent on your funds, calculate the future values of both payments. Use Appendix C to answer the question. Round your answers to the nearest dollar. FV (Offer 1): $ FV (Offer 2): $ Which offer will you accept, if you can earn 14 percent on your funds? Offer 2 Why are your answers different? The choices are different as the higher interest rate favors early payments