Present value of an annuity Determine the present value of $$200, 000$ to be recelved at the end of each of 4 years, using an interest rate of $10%$ , compounded annually, as follows: a. By succiessive computations, using the present value of $$1$ table in Exhibit 5. Round to the nearest whole dollar. b. By using the present value of an annuity of $$1$ table in Exhibit 7. Round to the nearest whole dollar. c. Why is the present value of the four $$200, 000$ cash receipts less than the $$800, 000$ to be received in the future? The present value is less due to over the 4 years.

Question

Present value of an annuity Determine the present value of

$200, 000

to be recelved at the end of each of 4 years, using an interest rate of

10%

, compounded annually, as follows: a. By succiessive computations, using the present value of

$1

table in Exhibit 5. Round to the nearest whole dollar. b. By using the present value of an annuity of

$1

table in Exhibit 7. Round to the nearest whole dollar. c. Why is the present value of the four

$200, 000

cash receipts less than the

$800, 000

to be received in the future? The present value is less due to over the 4 years.

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