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S26-10 (similar to) Question Help Your grandfather would like to share some of his fortune with you. He offers to give you money under one of the following scenarios (you get to choose): 1. $7,400 per year at the end of each of the next seven years 2. $50,250 (lump sum) now 3. $98,150 (lump sum) seven years from now (Click the icon to view Present Value of $1 table.) (Click the icon to view Present Value of Ordinary Annuity of $1 table.) Read the requirements. Requirement 1. Calculate the present value of each scenario using a 6% discount rate. Which scenario yields the highest present value? (Round the factors to three decimal places, X.XXX. Round the present value to the nearest whole dollar.) Present Value Scenario 1: Enter any number in the edit fields and then click Check Answer. ? Present Value of $1 Periods 1 2 3 4 5 1% 0.990 0.980 0.971 0.961 0.951 2% 0.980 0.961 0.942 0.924 0.906 3% 0.971 0.943 0.915 0.888 0.863 4% 0.962 0.925 0.889 0.855 0.822 5% 0.952 0.907 0.864 0.823 0.784 6% 0.943 0.890 0.840 0.792 0.747 7% 0.935 0.873 0.816 0.763 0.713 8% 0.926 0.857 0.794 0.735 0.681 9% 0.917 0.842 0.772 0.708 0.650 10% 0.909 0.826 0.751 0.683 0.621 12% 0.893 0.797 0.712 0.636 0.567 14% 0.877 0.769 0.675 0.592 0.519 15% 0.870 0.756 0.658 0.572 0.497 16% 0.862 0.743 0.641 0.552 0.476 18% 0.847 0.718 0.609 0.516 0.437 20% 0.833 0.694 0.579 0.482 0.402 6 7 8 9 10 0.942 0.933 0.923 0.914 0.905 0.888 0.871 0.853 0.837 0.820 0.837 0.813 0.789 0.766 0.744 0.790 0.760 0.731 0.703 0.676 0.746 0.711 0.677 0.645 0.614 0.705 0.665 0.627 0.592 0.558 0.666 0.623 0.582 0.544 0.508 0.630 0.583 0.540 0.500 0.463 0.596 0.547 0.502 0.460 0.422 0.564 0.513 0.467 0.424 0.386 0.507 0.452 0.404 0.361 0.322 0.456 0.400 0.351 0.308 0.270 0.432 0.376 0.327 0.284 0.247 0.410 0.354 0.305 0.263 0.227 0.370 0.314 0.266 0.225 0.191 0.335 0.279 0.233 0.194 0.162 11 12 13 0.896 0.887 0.879 n070 0.804 0.788 0.773 A 750 0.722 0.701 0.681 n91 0.650 0.625 0.601 0.585 0.557 0.530 no05 0.527 0.497 0.469 0.475 0.444 0.415 200 0.429 0.397 0.368 200 0.388 0.356 0.326 n 200 0.350 0.319 0.290 A 202 0.287 0.257 0.229 A 205 0.237 0.208 0.182 n.100 0.215 0.187 0.163 0.195 0.168 0.145 A 125 0.162 0.137 0.116 nnon 0.135 0.112 0.093 11 577 n11 n 144 nn 70 Present Value of Ordinary Annuity of $1 Periods 2% 3% 2 3 4 5 1% 0.990 1.970 2.941 3.902 4.853 0.980 1.942 2.884 3.808 4.713 0.971 1.913 2.829 3.717 4.580 4% 0.962 1.886 2.775 3.630 4.452 5% 0.952 1.859 2.723 3.546 4.329 6% 0.943 1.833 2.673 3.465 4.212 7% 0.935 1.808 2.624 3.387 4.100 8% 0.926 1.783 2.577 3.312 3.993 9% 0.917 1.759 2.531 3.240 3.890 10% 0.909 1.736 2.487 3.170 3.791 12% 0.893 1.690 2.402 3.037 3.605 14% 0.877 1.647 2.322 2.914 3.433 15% 0.870 1.626 2.283 2.855 3.352 16% 0.862 1.605 2.246 2.798 3.274 18% 0.847 1.566 2.174 2.690 3.127 20% 0.833 1.528 2.106 2.589 2.991 6 7 8 9 10 5.795 6.728 7.652 8.566 9.471 5.601 6.472 7.325 8.162 8.983 5.417 6.230 7.020 7.786 8.530 5.242 6.002 6.733 7.435 8.111 5.076 5.786 6.463 7.108 7.722 4.917 5.582 6.210 6.802 7.360 4.767 5.389 5.971 6.515 7.024 4.623 5.206 5.747 6.247 6.710 4.486 5.033 5.535 5.995 6.418 4.355 4.868 5.335 5.759 6.145 4.111 4.564 4.968 5.328 5.650 3.889 4.288 4.639 4.946 5.216 3.784 4.160 4.487 4.772 5.019 3.685 4.039 4.344 4.607 4.833 3.498 3.812 4.078 4.303 4.494 3.326 3.605 3.837 4.031 4.192 11 12 13 10.368 9.787 9.253 11.255 10.575 9.954 12.134 11.348 10.635 8.760 9.385 9.986 10 502 8.306 8.863 9.394 7.887 8.384 8.853 0206 7.499 7.943 8.358 7.139 7.536 7.904 6.805 7.161 7.487 7 700 6.495 6.814 7.103 5.938 6.194 6.424 10 5.453 5.660 5.842 5.234 5.421 5.583 5.029 5.197 5.342 4.656 4.793 4.910 4.327 4.439 4.533 14 12 na 4240 14 D Ooon O 740 0211 7207 nnn 5 704 Enno 1011 1. Calculate the present value of each scenario using a 6% discount rate. Which scenario yields the highest present value? Round to the nearest whole dollar. 2. Would your preference change if you used a 12% discount rate