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.$7,250 per year at the end of each of the next 8 years 2. $48,500 (lump sum) now 3. $99,400 (lump sum) 8 years from now Read the quirements. View the Present Value of $1 table. View the Present Value of Ordinary Annuity of $1 table Requirement 1. Calculate the present value of each scenario using an 8% 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) Scenario 1, 8% discount rate, Present value Scenario 2, 8% discount rate, Present value 41.666 Requirements K n B 8 1. Calculate the present value of each scenario using an 8% discount rate. Which scenario yields the highest present value? Round to the nearest whole dollar. 2. Would your preference change if you used a 10% discount rate? Present Value of $1 pol ch Periods 1% 2% 3% 4% 5% 6% 7% Period 1 0.990 0.980 0.971 0.962 0.952 0.943 0.935 0.926 Period 2 0.980 0.961 0.943 0.925 Period 3 0.971 0.942 0.15 0.889 0.864 0.907 0.890 0.873 0.857 0.840 0.816 0.794 Present Value of $1 8% 9% 10% 12% 14% 15% 16% 18% 20% 0.917 0.909 0.893 0.877 0.870 0.862 0.847 0.833 0.842 0.826 0.797 0.769 0.756 0,743 0.718 0.694 0.772 0.751 0.712 0.675 0.658 0.641 0.609 0.579 Period 41 0.961 0.924 0.888 0.855 0.823 0.792 0.763 0.735 Period 5 0.951 0.906 0.863 0.822 0.784 0.747 0.713 0.681 0.708 0.683 0.636 0.592 0.650 0.621 0.567 0.519 Period 6 0.942 0.888 0.837 0.790 0.746 0.705 0.666 0.630 0.596 0.564 0.507 0.456 Period 7 0.933 0.871 0.813 0.760 0.711 0.665 0.623 0.583 Period 8 0.923 0.853 0.789 0.731 0.677 Period 9 0.914 0:837 0.766 0.703 0.645 Period 10 0.905 0,820 0.744 0.676 0.614 Period 11 0.896 0.804 0.722 0.650 0.585 Period 12 0.887 0.788 0.701 0.625 0.557 0.497 Period 13 0.879 0.773 0.681 0.601 0.530 0.469 Period 14 0.870 0.758 0.661 0.577 0.505 0.442 Period 15 0.861 0.743 0.642 0.555 0.481 0.417 0.627 0.582 0.540 0.592 0.544 0.558 0.508 0.500 0.463 0.547 0.513 0.452 0.400 0.502 0.467 0.404 0.351 0.460 0.424 0.361 0.422 0.386 0.322 0.572 0.552 0.516 0.482 0.497 0.476 0.437 0.402 0.432 0.410 0.370 0.335 0.376 0.354 0.314 0.279 0.327 0.305 0.266 0.233. 0.308 0.284 0.263 0.225 0.194 0.270 bur 0.247 0.227 0.191 0.162 0.527 0.475 0.429 0.388 0.350 0.287 0.237 0.215 0.195 0.162 0.135 0.444 0.415 0.388 0.362 Period 16 0.853 0.728 0.623 0.534 0.458 0.394 Period 17 0.844 0.714 0.605 0.513 0.436 0.371 Period 18 0.836 0.700 0.587 0.494 0.416 0.350 Period 19 0.828 0.686 0.570 0.475 0.396 0.331 Period 20 0.820 0.673 0.554 0.456 0.377 0.312 0.339 0.317 0.296 0.277 0.258 0.397 0.356 0.319 0.257 0.208 0.187 0.168 0.137 0.112 0.368 0.326 0.290 0.229 0.182 0.163 0.145 0.116 0.093 0.340 0.299 0.263 0.205 0.160 0.141 0.125 0.099 0.078 0.315 0.275 0.239 0.183 0.140 0.123 0.108 0.084 0.065 0.292 0.252 0.218 0.163 0.123 0.107 0.093 0.071 0.054 0.270 0.231 0.198 0.146 0.108 0.093 0.080 0.060 0.045 0.250 0.212 0.180 0.130 0.095 0.081 0.069 0.051 0.038 0.232 0.194 0.164 0.116 0.083 0.070 0.060 0.043 0.031 0.215 0.178 0.149 0.104 0.073 0.061 0.051 0.037 0.026 ding Present Value of Ordinary Annuity of $1 point choe Present Value of Ordinary Annuity of $1 5.242 6.230 6.002 5% 6% 7% 8% 9% 10% 12% 14% 15% 16% 18% 0.952 0.943 0.935 0.926 0.917 0.909 0.893 0.877 0.870 0.862 0.847 0.833 1.859 1.833 1.808 1.783 1.759 1.736 1.690 1.647 1.626 1.605 1.566 1.528) 2.723 2.673 2.624 2.577 2.531 2487 2.402 2.322 2.283 2.246 2.174 2.106 3.546 3,465 3.387 3.312 3.240 3.170 3,037 2.914 2.855 2.798 2.690 2.589 4.329 4.212 4.100 3.993 3.890 3.791 3.605 3.433 3.352 3.274 3.127 2.991 5.076 4.917 4.767 4.623 4.486 4.355 4.111 3.889 3.784 3.685 3.498 3.326 5.786 5.582 5.389 5.206 5.033 4.868 4.564 4.288 4.160 4.039 3.812 3.605 6.463 6.210 5.971 5.747 5.535 5.335 4.968 4.639 4.487 4.344 4.078 3.837 7.108 6.802 6.515 6.247 5.995 5.759 5.328 4.946 4.772 4.607 4.303 4.031 7.722 7.360 7.024 6.710 6.418 6.145 5.650 5.216 5.019 4.833 4.494 4.1921 20% bund Periods 1% 2% 3% 4% Period 1 0.990 0.980 0.971 0.962 Period 2 1.970 1.942 1913 1.886 Period 3 2.941 2.884 2.829 2.775 Period 4 3.902 3.808 3.717 3.630 Period 5 4.853 4.713 4.580 4.452 Period 6 5.795 5.601 5.417 Period 7 6.728 6.472 Period 8 7.652 7.325 7.020 6.733 Period 9 8.566 8.162 7.786 7.435 Period 10 9.471 8.983 8.530 8.111 Period 11 10.368 9.787 9.253 8.760 8.306 7.887 7.499 7.139 6.805 6.495 5.938 5.453 5.234 5.029 4.656 4.327 Period 12 11.255 10.575 9.954 9.385 8.863 8.384 7.943 7.536 7.161 6.814 6.194 5.660 5.421 5.197 4.793 4439 Period 13 12.134 11.348 10.635 9.986 9.394 8.853 8.358 7.904 7.487 7.103 6.424 5.842 5.583 5.342 4.910 4.533 Period 14 13.004 12.106 11.296 10.563 9.899 9.295 8.745 8.244 7.786 7.367 6.628 6.002 5.724 5.468 5.008 4.611 Period 15 13.865 12.849 11.938 11.118 10.380 9.712 9.108 8.559 8.061 7.606 6.811 6.142 5.847 5.575 5.092 4.675 Period 16 14.718 13.578 12.561 11.652 10.838 10.106 9.447 8.851 8.313 7.824 6.974 6.265 5.954 5.669 5.162 4.730 Period 17 15.562 14.292 13.166 12.166 11.274 10.477 9.763 9.122 8.544 8.022 7.120 6.373 6.047 5.749 5.222 4.775 Period 18 16.398 14.992 13.754 12.659 11.690 10.828 10.059 9.372 8.756 8.201 7.250 6.467 6.128 5.818 5.273 4.812 Period 19 17.226 15.678 14.324 13.134 12.085 11.158 10.336 9.604 8.950 8.365 7.366 6.550 6.198 5.877 5.316 4.844 Period 20 18.046 16.351 14.877 13.590 12.462 11.470 10.594 9.818 9.129 8.514 7.469 6.623 6.259 5.929 5.353 4.870 Print Done