Your grandmother would like to share some of her fortune with you. She 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 eight years 2. $48,750 (lump sum) now 3. $98,650 (lump sum) eight years from now Calculate the present value of each scenario using an 8% interest rate. Which scenario yields the highest present value? Would your preference change if you 12% interest rate? (Click the icon to view the present value annuity factor table.) (Click the icon to view the future value annuity factor table.) (Click the icon to view the present value factor table.) (Click the icon to view the future value factor table.) Using an 8% interest rate, calculate the present values for each scenario. (Round the amounts to the nearest dollar.) Present value of Scenario 1 Present Value of Annuity of $1 Present Value of Annuity of $1 E Periods 1% 2% 3% 4% 5% 6% 8% 10% 12% 14% 16% 18% 20% Period 1 0.990 0.980 0.971 0.962 0.952 0.943 0.926 0.909 0.893 0.877 0.862 0.847 0.833 Period 2 1.970 1.942 1913 1.886 1.859 1.833 1.783 1.736 1.690 1.647 1.605 1.566 1.528 Period 3 2.941 2.884 2.829 2.775 2.723 2.673 2.577 2.487 2.402 2.322 2.246 2.174 2.106 Period 4 3.902 3.808 3.717 3.630 3.546 3.465 3.312 3.170 3.037 2.914 2.798 2.690 2.589 Period 5 4.853 4.713 4.580 4.452 4.329 4212 3.993 3.791 3.605 3.433 3.274 3.127 2.991 Period 6 5.795 5.601 5.417 5.242 5.076 4.917 4.623 4.355 4.111 3.889 3.685 3.498 3.326 Period 7 6.728 6.472 6.230 6.002 5.786 5.582 5.206 4.868 4.564 4.288 4.039 3.812 3.605 Period 8 7.652 7.325 7.020 6.733 6.463 6210 5.747 5.335 4.968 4.639 4.344 4.078 3.837 Period 9 8.566 8.162 7.786 7.435 7.108 6.802 6.247 5.759 5.328 4.946 4.607 4.303 4.031 Period 9.471 89838.530 8.111 7.722 7.360 6.710 6.145 5.650 5.216 4.833 4.494 4.192 10 Period 11 10,368 9.787 9.253 8.760 8.306 7.887 7.139 6.495 5.938 5.453 5.029 4.656 4.327 Period 11.255 10.575 9.954 9.385 8.863 8.384 7.536 6.814 6.194 5.660 5197 4.793 4.439 12 Period 13 12.134 11.348 10.635 9.986 9.394 8.853 7.904 7.103 6.424 5.842 5342 4.910 4.533 Period 13.004 12.106 11.296 10.563 9.899 9.295 8.244 7.367 6.628 6.002 5.468 5.008 4.611 14 Period 15 13.865 12.849 11.938 11.118 10.380 9.712 8.559 7.606 6.811 6.142 5.575 5.092 4.675 Period: 18.046 16.351 14.877 13.590 12.462 11.470 9,818 8.514 7.469 6.623 5.929 5.353 4.870 201 Period 25 22.023 19.523 17.413 15.622 14.094 12.783 10.675 9.077 7.843 6.873 6.097 5.467 4.948 Period 25.808 22.396 19.600 17.292 15.372 13.765 11.258 9.427 8.055 7,003 6.177 5.517 4.979 30 Period 32.835 27.355 23.115 19.793 17.159 15.046 11.925 9.779 8.244 7.105 6.233 5.548 4.997 40. X