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. $8,750 a year at the end of each of the next seven years 2. $50,050 (lump sum) now 3. $99,850 (lump sum) seven years from now Calculate the present value of each scenario using a 6% interest rate. Which scenario yields the highest present value? (Click the icon to view the present value annuity factor table.) (Click the icon to view the pres Data table - X a table Present Value of Annuity of $1 Using a 6% interest rate, calculate the present values for each scenario. (Round the amounts to the neares Present Value of $1 Period 6% 8% 10% 12% Present value Scenario 1 Scenario 2 = = Scenario 3 = Period 6% 8% 10% 12% 1 0.943 0.926 0.909 0.893 1 0.943 0.926 0.909 0.893 2 1.833 1.783 1.736 1.690 2 0.890 0.857 0.826 0.797 3 2.673 2.577 2.487 2.402 3 0.840 0.794 0.751 0.712 4 3.465 3.312 3.170 3.037 4 0.792 0.735 0.683 0.636 Which scenario yields the highest present value? 5 4.212 3.993 3.791 3.605 5 0.747 0.681 0.621 0.567 6 4.917 4.623 4.355 4.111 appears to be the best option. Based on a 8% interest rate, its present value is the 6 0.705 0.630 0.564 0.507 7 5.582 5.206 4.868 4.564 7 0.865 0.583 0.513 0.452 8 6.210 5.747 5.335 4.968 8 0.627 0.540 0.467 0404 g 6.802 6.247 5.759 5.328 Scenario 1 Scenario 2 9 0.592 0.500 0.424 0.361 10 7.360 6.710 6.145 5.650 10 0.558 0.463 0.386 0.322 Scenario 3 Print Done