Item 3

In three years, when he is discharged from the Air Force, Steve wants to buy a $25,000 power boat.

Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using tables.

Present Value 1. Six percent 2. Ten percent

Required:

What lump-sum amount must Steve invest now to have the $25,000 at the end of three years if he can invest money at: (Round your final answer to the nearest whole dollar amount.) For six percent and ten percent.