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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. $7.750 a year at the end of each of the next six years 2. $50.250 (lump sum) now 3. $98.150 (lump sum) six 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 used a 12% interest rate? (Click the icon to view the present value annuity factor table.) Click the icon to view the present value factor table.) (Click the icon to view the future value annuity 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 Scenario 1 Scenario 2 Scenario 3 - = - Which scenario yields the highest present value? appears to be the best option. Based on an 8% interest rate, its present value is the Using a 12% interest rate, caloulate the present values for each scenario (Round the amounts to the nearest dollar) Present value Scenario 1 Scenario 2 Scenario 3 = = - appears to be the best option. Based on a 12% interest rate its present value is the T arge you used a 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) yul (Click the icon to view the present value factor table) Click the icon to view the future value factor table.) Present Value of Annuity of S1 Present Value of Annuity of $1 2013 1962 0.833 0980 1970 1.942 1528 2.105 88 NM v 2174 2.690 2 500 8 888 988888 : 888 3.750 e $8B BODO 8.530 9.787 9.253 10.575 9.964 9.385 11348 10.6359.986 12.106 11.296 10.563 9999 12.849 11.938 11.118 10.380 18.046 16.35 14.877 13.590 12.452 11.470 19.52317.413 15.622 14.094 12.783 10.6759077 22 396 19.600 17.292 15372 13.765 11.2589.427 27 355 23.115 19.793 17.159 15.046 11.9259.7798244 *88888 8888 oio SUS 22835 Print Done Future Value of Annuity of $1 - X Scenario 1 Scenario 2 Scenario 3 Future Value of Annuity of $1 Which scenari UN - 1% 1.000 2010 3.030 4.060 5.101 25 1.000 2020 3.060 4.122 5.204 Using a 12% in a Scenario 1 Scenario 2 Scenario 3 6.152 7.214 8.286 9.369 10.462 11.567 12.683 13.809 14.047 16.097 22.019 4% 5% 1.000 1.000 1.000 2030 2.040 2.050 3.091 3.122 3.153 4.184 4.246 4310 5.309 5.416 5.525 6.468 6.633 6.802 7.662 7.898 8.142 8.892 9.214 9.549 10.159 10.583 11.027 11.464 12.006 12.578 12.808 13.486 14.207 14. 192 15.026 15.917 15.618 16.627 17.713 17.086 18.292 19.599 18.599 20.024 21.579 26.870 29.778 33.066 36.459 41.646 47.727 47575 56.085 66.439 75.40196.026120.800 6.308 7.434 8.583 9.755 10.950 12.169 13.412 14.680 15.974 17.293 24.297 32.030 40.568 60.402 6% 1.000 2.060 3.184 4375 5.637 6.975 8.394 9.897 11.491 13.181 14.972 16.870 18.882 21.015 23.276 36.786 54.965 79.058 154.762 8% 1.000 2.080 3.246 4 506 5.867 7.336 8.923 10.637 12.488 14487 16.645 18.977 21.495 24.215 27.152 45.762 73.106 113.283 259.057 10% 12% 1.000 1.000 2.100 2.120 3.310 3.374 4.641 4.779 6.105 6.353 7.716 8.115 0487 10.089 11.436 12.300 13.579 14.776 15.937 17.549 18.531 20.655 21.384 24.133 24 523 28.029 27.975 32.393 31.772 37.280 57.275 72.052 98.347 133.334 164.494 241.333 442.593767.091 58880 14% 18% 19% 20% 1.000 1.000 1.000 1.000 2.140 2.160 2.180 2.200 3.440 3.506 3.572 3.640 4.921 5.066 5.215 5.368 6.610 6.877 7.154 7.442 8.536 8.977 9.442 9.930 10.730 11.414 12.142 12916 13.233 14.240 15.327 16.499 16.085 17.519 19.086 20.799 19.337 21.321 23.521 25.959 23.045 25.733 28.755 32.150 27.271 30.850 34.931 39.581 32.089 36.786 42219 48.497 37.581 43.672 50.818 59.196 43.842 51.660 60.965 72.035 91.025 115.380 146.628 186.688 181.871 249.214 342.603 471.981 356.787 530.312790.948 1,181.882 1,342.0252360.757 4.163.2137,343.858 28.243 48.886 Print Done 1 0 24 27 0 Future Value of $1 Scenario 1 Scenario 2 Scenario 3 Future Value of $1 Periods 546 Which scenari 12% 1.120 1060 2% 1.020 1.040 1.001 1.082 1.104 1254 3% 1.030 1.061 1.098 1.126 1.159 1.194 1230 1.267 4% 11.040 1.082 1.125 1.170 1217 1.265 8% 1.080 1.166 1 260 1.300 1.469 10% 1.100 1.210 1.331 1.484 91 1252 1338 Using a 12% in 1% 1.010 1.020 1030 1.041 1.051 1.062 1.072 1.083 1.094 1.105 1.116 1.127 1.138 1.149 1611 1316 18% 1.180 1.392 1.643 1939 2.288 2.700 3.185 3.759 4.435 5.234 1.126 1.149 1.172 1.195 1.219 1050 + 403 1.158 1216 1276 1.340 1.407 1.477 1.551 1629 1.710 1.796 1.886 1.980 2079 2653 3.386 1.369 1.423 1.772 1.049 2.144 2.358 2.594 Scenario 1 Scenario 2 Scenario 3 14% 1.140 1300 1.482 1.689 1.925 2.195 2.502 2853 3.252 3.707 4.226 4818 5.492 6.261 7.138 1.305 10% 1.160 1.346 1561 1811 2.100 2.436 2.826 3.278 3.803 4.411 5.117 5.936 6.886 7.988 9.256 1480 1419 1.504 1.594 1.689 1.791 1.898 2012 2.133 2261 2397 3.207 4 292 5.743 10286 1.344 1.384 1426 1.469 1.513 1.558 1.243 1.268 1.294 1319 1345 1.587 1.714 1.851 1999 2.159 2 332 2518 2.720 2937 3.172 4.661 6.848 10.063 21.725 20% 1 200 1.440 1.728 2074 2.488 2096 3.583 4.300 5.160 6.192 7.430 8.916 10.699 12839 15.407 39325 95.396 237.376 1.469.772 1.405 1.574 1762 1.974 2211 2.476 2.773 3.106 3.479 3.896 4.363 4.887 5.474 9.646 17.000 29.960 99.051 1.539 1.601 1.665 1.732 1801 2191 2666 3.243 4801 2.853 3.138 3.452 3.797 4.177 6.727 10835 17.449 45.259 1.161 6.176 7.288 8.599 10.147 11.974 1220 1800 1.541 2002 1 282 1.348 1489 13.743 19.461 26.462 40874 50.950 85.850 188.884378.721 27.393 62.669 143.371 750.378 2208 3262 7.040 Print Done Using an 896 interest rate, calculate the EARL I E PODOBA Round Present value 6 Present Value of $1 Scenario 1 Scenario 2 Scenario 3 = = = 18% 20% Which scenario yields the highest 0.833 Periodsl 1% 0.090 0.980 0.971 0.961 2% 0.980 0.961 0.942 0.924 3% 0,971 0.043 0915 0.888 4% 0.962 0.925 0.889 0.855 0.718 appears to be the be 0.694 0.579 0.482 0402 Using a 12% interest rate, calculate Present value OOO OOOOO Scenario 1 Scenario 2 Scenario 3 = = = Present Value of $1 5% 6% 8% 10% 12% 14% 18% 0.92 0.043 0.926 0.0090.893 0.877 0.862 0.847 0.8570.826 0.797 0.769 0.743 0.751 0.712 0.675 0.641 0,609 0.683 0.636 0.592 0.552 0.516 0.621 0.567 0.519 0.476 0 564 0.507 0.4560.410 0.452 0.400 0.354 0.404 0.361 0.305 0.361 0.308 0.263 0.322 0.270 0.227 0.287 0.237 0.1950.162 0.257 0.208 0.168 0 2900 229 0.182 0.145 0.116 0.205 0.160 0.125 0.099 0.239 0.183 0.140 0.108 0.084 0.377 0.312 0.149 0.104 0.073 0.061 0.037 0.295 0.233 0.146 0.092 0.059 0.038 0.024 0.016 0.23 0.174 0.099 0.067 0.033 0.0200.012 0.007 0.142 0.097 0.046 0.022 0.0110.005 0.003 0.001 OOOOOOOOOO OOOOOOOOOOOOOO 0.233 0.162 OOOOOOOOOOO 0.135 appears to be the bed 0.112 0.093 0.078 0.065 0.026 0.010 0.004 0.001 0.673 0.610 0 552 0.453 0.554 0.478 0.412 0.307 0.456 0.375 0.308 0.208 0.672 Print Done
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