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Present Value of Amounts Due Tommy John is going to receive $560,000 in three years. The current market rate of interest is 13%. a. Using

Present Value of Amounts Due

Tommy John is going to receive $560,000 in three years. The current market rate of interest is 13%.

a. Using the present value of $1 table in Exhibit 8, determine the present value of this amount compounded annually. Round to the nearest whole dollar.

b. Why is the present value less than the $560,000 to be received in the future? The present value is less due to over the 3 years.

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