Question list
Question 1
Question 2
Question 3
Question 4
Question 5
Question 6
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):
$8,400 per year at the end of each of the next 7 years
$50,000 (lump sum) now
$98,600 (lump sum) 7 years from now
Read the requirements.
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 =
Requirements
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.
Would your preference change if you used a 12% discount rate?
Question listQuestion 1O Question 2O Question 3O Question 4O Question 5O Question 6PeriodsPeriodPeriod 2PeriodYour grandfather would like to share some of his fortune with you. He offers to give you money under one of thefollowing scenarios (you get to choose):Period.1. $8,400 per year at the end of each of the next 7 yearsPeriod2. $50,000 (lump sum) now3. $98,600 (lump sum) 7 years from nowRead the reguirements.View the Present Value of $1 table.Present Value of 0rdinary Annuity of $1Requirement 1. Calculate the present value of each scenario using an 8% discount rate. Which scenario yields thehighest present value? (Round the factors to three decimal places, X.XXX. Round the present value to the nearestwhole dolar.)Scenario 1, 8% discount rate, Present value =1% 2% 3% 4% 5% 6% 7%8% 9% 10% 12% | 14% 15% 16% 18% 20%T0.9900.980 0.9710.9620.952 0.943|0.9350.926 0.917 0.9090.893 0.877 0.8700.862 0.847 0.8331.970 1.942 1.913 1.8861.859 .8331.8081.783| 1.7591.736|1.6901.647| 1.626 1.6051.566|1.5282.9412.8842.829 2.775|2.723|2.6732.624|2.577|2.531|2.487 2.402|2.322| 2.2832.246|2.174|2.1063.9023.808 3.717 3630 .546|3.465|3.387 3.3123.240|3.1703.037|2.914| 2.8552.798|2.6902.5894.853 4.713 4.580 4,452 4.3294.212|4.1003.993|3.890 3.7913,605 3.433|3.3523.2743.127|2.991Period 5.795 5.601 5.417 5.2425.076|4.917|4.7674.623|4.486 4.355|4.111|3.889 3.784|3.6853.498|3.326Period 6.728|6.472 6.2306.002|5.786| 5.582 5.389 5.206|5.033 4.868 4.564|4.288 4.160|4.0393.812 |3.605Period |7.652|7.325|7.0206.7336.4636.210|5.971|5.747 5.535 5.335|4.9684.6394,487|4.344|4.0783.837Period 8.5668.1627.7867.4357.1086.8026.5156.247 5.995 5.7595.328|4.946| 4.7724.607|4.3034.031Period 109.471 8.983 8.530 8.1117.722 .3607.0246.7106.418|6.1455.6505.216| 5.0194.8334.494|4.192Period 11 10.368 9.7879.2538.760 .306|7.887|7.499|7.1396.805|6.4955.938|5.453| 5.234 5.0294.656|4.327Period 1211.25510.575 9.954|9.385|8.863 8.384|7.943|7.536|7.1616.814|6.194| 5.660 5.4215.197|4.793|4.439Period 1312.13411.348|10.635 9.9869.394|8.8538.3587.904|7.4877.1036.4245.842 5.583|5.3424.910 4.533Period 1413.00412.106|11.29610.563 9.8999.2958.7458.244|7.786|7.3676.6286.002 5.7245.468|5.0084.611Period 1513.86512.84911.93811.11810,380 9,7129.1088.559 l8.061 7.606|6.811 6.142 5.847| 5.575| 5.092|4.675|Period 16h4.71813.578|12.56111.65210.83810.106 9.447 8.8518.313|7.8246.974 6.265|5.954 5.669|5.162|4.730Period 1715.56214.29213.16612.16611.27410.477 9.7639.122| 8.544 8.022|7.12o6.373 6.0475.749|5.222|4.775|Period 1816.39814.992|13.754|12.65911.69010.82810.059| 9.372|8.756| 8.2017.2506.467|6.1285.818|5.273|4.812Period 1917.22615.678|14.32413.13412.08511.15810.336 9.604|8.950 8.365|7.366|6.5506.198 5.8775.316|4.844|Period 2018.04616.351 14.877|13.59012.46211.47010.594|9.8189.129 8.514 7.4696.6236.259 5.929 5.353|4.870Period 21 h8.8517.01115.415]14.02912.821h1.76410.83610.0179.292|8.649 7.5626.687 6.3125.973 | 5.3844.891Period 22 19.66017.65815.937|14.451|13.16312.04211.061|10.201|9.442| 8.772|7.6456.743|6.3596.0115.410 4.909Period 23 20.45618.29216.44414.85713.48912.30311.27210.3719.5808.883 .7186.7926.3996.044 5,4324.925Period 2421.24318.91416.93615.24713.79912.55011.46910.5299.707|8.9857.7846.8356.434 |6.0735.4514.937View the Present Value of Ordinary Annuity of $1 table,Present Value of Ordinary Annuity of $1Period 26 22.79520.121 17.877|15.98314.37513.00311.82610.810 9.9299.161 7.896|6.906|6.491|6.118|5.4804.956|Period 27 23.56020.707|18.327|16.33014.64313.211/11.987]10.93510.027| 9.2377.9436.9356.514 6.136|5.492|4.964|Period 2824.31621.281|18.76416.66314.89813.40612.13711.05110.1169.3077.9846.9616.534 |6.152|5.5024.970Period 2925.06621.84419.188|16.984|15.141|13.591 12.278|11.15810.198 9.370 8.022 6.983 6.5516.166|5.510 4.975Period 3025.80822.396|19.600|17.2921 5.372
Question list
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. $8,400 per year at the end of each of the next 7 years 2. $50,000 (lump sum) now 3. $98,600 (lump sum) 7 years from now Read the requirements. View the Present Valve of S1 table. View the Present Value of Ordinary Annuity of S1 table.
KK
Question 1
Question 2
O Question 3
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.)
O Question 4
Scenario 1, 8% discount rate, Present value =
O Question 5
O Question 6
Present Value of $1
Present Value of $1 Periods1%2%3%4%5%6% 7% 8% 9%10%12%14%15%16%18%20% Period 1 0.990[0.9800.9710.9620.9520.9430.9350.926[0.9170.9090.8930.8770.8700.8620.8470.833 Period 2[0.9800.9610.9430.9250.9070.8900.873 0.8570.8420.8260.7970.7690.7560.7430.7180.694 0.7940.7720.7510.7120.6750.6580.6410.6090.579
Period5 [0.9510.9060.8630.8220.784 0.713 0.681 0.6500.6210.5670.5190.4970.4760.4370.402 Period 6 [0.9420.8880.8370.7900.746 0.705 0.666 0.630 0.5960.5640.5070.4560.4320.4100.3700.335 Period 7 [o.9330.871|0.8130.7600.711 0.665 0.623 0.583 0.547 0.5130.4520.400 0.3760.3540.314 0.279 Period 8[0.9230.8530.7890.7310.677 0.627 0.582 0.540 0.5020.4670.4040.351 0.3270.3050.2660.233 Period 9 [0.9140.8370.7660.7030.645 0.592 0.544 0.500 0.460 0.424|0.361| 0.308 0.2840.2630.2250.194 Period 10|0.9050.8200.7440.676 0.614 0.558 0.508 0.463 0.322 0.270 0.2470.2270.191 [0.162 Period 11|0.8960.8040.7220.6500.5850.527 0.475 0.429 0.3880.3500.2870.237 0.2150.1950.1620.135 Period 12|0.8870.7880.7010.6250.557 0.497 0.444 0.397 0.356 0.3190.2570.2080.1870.1680.1370.112 Period 13|0.8790.7730.6810.6010.530 0.469 0.415 0.368 0.326 0.2900.2290.1820.1630.1450.1160.093 Period 14|0.8700.7580.6610.5770.505 0.442 0.388 0.340 0.299 [0.2630.2050.1600.1410.1250.0990.078 Period 15|0.861|0.7430.6420.555 0.362 |0.2390.1830.1400.1230.1080.0840.065 Period 16|0.8530.7280.6230.5340.458 0.3940.339 0.292 0.252|0.2180.1630.1230.1070.0930.0710.054 Period 170.8440.7140.605|0.513|0.436 0.371 0.317 0.270 0.2310.1980.1460.1080.0930.0800.0600.045 Period 18|0.8360.7000.5870.4940.416 0.350 0.296 0.250 0.212|0.1800.1300.0950.0810.0690.0510.038 Period 19|0.8280.6860.5700.4750.396 0.331 0.277 0.232 0.1940.1640.1160.0830.0700.0600.043 0.031 Period 20|0.820[0.6730.554|0.4560.377 0.312 0.258 0.1490.1040.0730.0610.0510.0370.026 Period 21|0.8110.6600.5380.4390.359 0.294 0.242 16610 0.164|0.1350.093|0.064|0.0530.044|0.0310.022 Period 22|0.803[0.6470.5220.4220.342 0.278 0.226 0.1840.1500.1230.0830.0560.0460.0380.0260.018 Period 23|0.7950.6340.5070.4060.326 0.262 0.211 0.1700.1380.1120.0740.0490.0400.0330.0220.015 Period 24|0.7880.6220.4920.3900.310 0.247 0.197 0.158 0.126|0.1020.0660.0430.0350.0280.0190.013 Period 250.7800.6100.4780.3750.295 0.18 0.0920.0590.0380.0300.0240.0160.010 Period 26|0.7720.5980.4640.3610.281 0.220 0.172 0.1350.1060.0840.0530.0330.0260.0210.0140.009 Period 27|0.7640.5860.4500.3470.268 0.2070.161 0.1250.0980.0760.0470.0290.0230.0180.0110.007 Period 28|0.7570.5740.4370.3330.255 0.1960.150 Period 29|0.7490.5630.4240.3210.243 0.1850.141 0.1070.0820.0630.0370.0220.0170.0140.0080.005 Period 30|0.7420.5520.4120.3080.231 0.1740.131 0.0990.0750.0570.0330.020 0.0150.0120.0070.004 Period 40|0.6720.453 .142 10.09 0.06 0.0220.01 0.00 0.0030.0010.001 Period 50|0.6080.3720.2280.1410.0870.0540.034 0.0210.0130.0090.0030.0010.0010.001
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