Problem 11-3 Eftect of discount rate [LO11-3] A brilliant young scientist is killed in a plane crash. It is anticipated that he could have earned $290,000 a year for the next 20 years. The attorney for the plaintiff's estate argues that the lost income should be discounted back to the present at 8 percent. The lawyer for the defendant's insurance company argues for a discount rate of 12 percent. What is the difference between the present value of the settlement at 8 percent and 12 percent? Compute each one separately. Use for an approximate answer but calculate your final answer using the formula and financial calculator methods. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Appendix D (concluded) Present value of an annuity of $1