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Present Value of an Annuity Determine the present value of $250,000 to be received at the end of each of four years, using an interest
Present Value of an Annuity Determine the present value of $250,000 to be received at the end of each of four years, using an interest rate of 5.5%, compounded annually, as follows: a. By successive 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. X c. Why is the present value of the four $250,000 cash receipts less than the $1,000,000 to be received in the future? The present value is less due to over the 4 years. Present Value of Amounts Due Assume that you are going to receive $750,000 in 10 years. The current market rate of interest is 4.5%, compounded annually. 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. $X b. Why is the present value less than the $750,000 to be received in the future? The present value is less due to over the 10 years
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