On December $1,2025,$ Richards Company sold some machinery to Fleming Company. The two companies entered into an installment sales contract at a predetermined interest rate. The contract required four equal annual payments with the first payment due on December $1,2025,$ the date of the sale. What time value of money concept is appropriate for this situation?

Future amount of an annuity of $1$ for four periods

Present value of an ordinary annuity of $1$ for four periods

Present value of an annuity due of $1$ for four periods

Future amount of $1$ for four periods