The present value of the settlement

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A brilliant young scientist is killed in a plane crash. It was anticipated that he could have earned $330,000 a year for the next 50 years. The attorney for the plaintiff’s estate argues that the lost income should be discounted back to the present at 6 percent. The lawyer for the defendant’s insurance company argues for a discount rate of 12 percent. What is the difference between the present value of the settlement at 6 percent and 12 percent? Compute each one separately. Use Appendix D. (Round "PV Factor" to 3 decimal places. Round your answers to the nearest dollar amount. Omit the "$" sign in your response) Present value PV at 6% rate $ PV at 12% rate Difference $

Reference no: EM131014976

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