Saved Help 1 A brilliant young scientist is killed in a plane crash. It is anticipated that he could have earned $360,000 a year for the next 30 years. The attorney for the plaintiff's estate argues that the lost income should be discounted back to the present at 4 percent. The lawyer for the defendant's insurance company argues for a discount rate of 10 percent. 10 points What is the difference between the present value of the settlement at 4 percent and 10 percent? Compute each one separately. Use Appendix D 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.) eBook Hint Present Value Print PV at 4% rate PV at 10% rate References Difference Appendix D Present value of an annuity of $1. PV16, 1 PVA=A1- (1 + 1)" Percent Period 1% 2% 3% 4% 5% 6% 8% 9% 10% 11% 12% 1 0.980 1.942 0.971 1.913 0.962 1.886 7% 0.935 1.808 0.952 1.859 2 0.909 1.736 2.487 0.893 1.690 0.917 1.759 2.531 3.240 3 0.990 1.970 2.941 3.902 4.853 5.795 6.728 2.884 3.808 2.624 3.387 0.943 1.833 2.673 3.465 4.212 4.917 2.829 3.717 4.580 5.417 2.402 3.037 4 2.775 3.630 4.452 5.242 0.901 1.713 2.444 3.102 3.696 4.231 2.723 3.546 4.329 5.076 5.786 5 4.100 4.767 3.170 3.791 4.355 6 7 6.002 4.868 4.712 8 4.713 5.601 6.472 7.325 8.162 8.983 9.787 5.146 6.733 7.435 8.111 8.760 6.463 7.108 7.722 8.306 3.890 4.486 5.033 5.535 5.995 6.418 6.805 5.582 6.210 6.802 7.360 7.887 9 0.926 1.783 2.577 3.312 3.993 4.623 5.206 5.747 6.247 6.710 7.139 7.536 7.904 8.244 8.559 8.851 3.605 4.111 4.564 4.968 5.328 5.650 5.938 5.335 5.759 6.145 6.495 10 5.537 5.889 6.207 11 12 7.161 7.487 13 8.384 8.853 9.295 9.712 14 9.385 9.986 10.563 11.118 11.652 6.492 6.750 6.982 7.191 7.652 8.566 9.471 10.368 11.255 12.134 13.004 13.865 14.718 15.562 16.398 17.226 18.046 22.023 25.808 32.835 39.196 6.230 7.020 7.786 8.530 9.253 9.954 10.635 11.296 11.938 12.561 13.166 13.754 14.324 14.877 17.413 19.600 23.115 25.730 15 5.389 5.971 6.515 7.024 7.499 7.943 8.358 8.745 9.108 9.447 9.763 10.059 10.336 10.594 11.654 12.409 7.786 8.061 8.313 16 10.575 11.348 12.106 12.849 13.578 14.292 14.992 15.678 16.351 19.523 22.396 27.355 31.424 17 18 8.863 9.394 9.899 10.380 10.838 11.274 11.690 12.085 12.462 14.094 15.372 17.159 18.256 6.814 7.103 7.367 7.606 7.824 8.022 8.201 8.365 8.514 10.106 10.477 10.828 11.158 11.470 12.783 13.765 8.544 8.756 8.950 9.129 12.166 12.659 13.134 13.590 15.622 17.292 19.793 21.482 19 20 25 30 40 6.194 6.424 6.628 6.811 6.974 7.120 7.250 7.366 7.469 7.843 8.055 8.244 8.304 9.122 9.372 9.604 9.818 10.675 11.258 11.925 12.233 7.379 7.549 7.702 7.839 7.963 8.422 8.694 8.951 9.042 9.823 10.274 10.757 10.962 9.077 9.427 9.779 9.915 15.046 15.762 13.332 13.801 50 ion distribution without the prin vithout the prior written consent of Me written consent of McGraw-Hill Education Appendix D (concluded) Present value of an annuity of $1 Percent Period 13% 15% 16% 17% 18% 19% 20% 25% 30% 35% 40% 50% 0.714 0.667 0.862 1.605 0.847 1.566 0.840 1.547 0.833 1.528 0.800 1.440 0.769 1.361 0.741 1.289 2 1.224 0.885 1.668 2.361 2.974 2.246 2.174 1.816 3 4 14% 0.877 1.647 2.322 2.914 3.433 3.889 4.288 4.639 0.870 1.626 2.283 2.855 3.352 3.784 1.111 1.407 1.605 2.166 0.855 1.585 2.210 2.743 3.199 3.589 3.922 4.207 5 3.517 3.998 2.798 3.274 3.685 4.039 4.344 1.737 2.140 2.639 3.058 3.410 3.706 3.954 2.690 3.127 3.498 3.812 4.078 6 2.106 2.589 2.991 3.326 3.605 3.837 4.031 1.696 1.997 2.220 2.385 2.508 7 4.423 4.799 2.436 2.643 2.802 2.925 3.019 4.160 4.487 8 1.824 1.883 1.922 1.948 2.598 4.946 4.163 10 4.192 1.965 4.451 4.659 4.836 4.988 11 12 4.607 4.833 5.029 5.197 5.342 4.339 4.486 4.611 4.71 4.802 4.772 5.019 5.234 5.421 5.583 5.724 5.847 5.954 6.047 4.327 4.439 4.533 13 5,118 1.952 2.362 2.689 2.951 3.161 3.329 3.463 3.571 3.656 3.725 3.780 3.824 3.859 3.887 3.910 3.928 3.942 3.954 3.985 1.977 1.985 1.990 1.993 1.995 14 5.468 5.575 5.229 5.324 5.132 5.426 5.687 5.918 6.122 6.302 6.462 6.604 6.729 6.840 6.938 7.025 7.330 7.496 7.634 7.675 5.216 5.453 5.660 5.842 6.002 6.142 6.265 6.373 6.467 6.550 6.623 6.873 7.003 7.105 7.133 15 1.589 1.849 2.035 2.168 2.263 2.331 2.379 2.414 2.438 2.456 2.469 2.478 2.484 2.489 2.492 2.494 2.496 2.497 2.499 2.500 2.500 2.500 5.668 5.749 4.303 4.494 4.656 4.793 4.910 5.008 5092 5.162 5,222 5.273 5.316 5.353 5.467 5.517 5.548 5.405 5.475 4.611 4.675 4.730 4.775 4.812 16 17 18 19 20 25 30 40 50 3.092 3.147 3.190 3.223 3.249 3.268 3.283 3.295 3.304 3.311 3.316 3.329 3.332 3.333 3.333 2.665 2.715 2.752 2.779 2.799 2.814 2.825 2.834 2.840 2.844 2.848 2.850 2.856 2.857 2.857 2.857 1.997 -1.998 6.128 6.198 6.259 5.818 5.877 4.876 4.938 4.988 5.033 5.070 5.101 5,195 5.235 5.258 5.262 5.534 5.584 1.999 1.999 1.999 2.000 5.929 6.464 5.628 5.766 5.829 5.871 6.097 6.177 6.233 4.843 4.870 4.948 4.979 4.997 4.999 6.566 6.642 3.995 2.000 2.000 3.999 6.661 6.246 5.880 5.554 4.000 2.000