Present value of amounts due

Assume that you are going to receive $$640,000$ in $10$ years. The current market rate of interest is $6\%.$

a$.$ Using the present value of $$1$ table in Exhibit $5,$ determine the present value of this amount compounded annually. Round to the nearest whole

dollar.

&

b$.$ Why is the present value less than the $$640,000$ to be received in the future?

The present value is less due to the compounding of interest

over the $10$ years.