Present value of an annuity

Determine the present value of $210,000 to be received at the end of each of 4 years, using an interest rate of 10%, compounded annually, as follows:

a. By successive computations, using the present value of $1 table in Exhibit 5. Round to the nearest whole dollar.

Year	Present Value
First year	$fill in the blank 1
Second Year	fill in the blank 2
Third Year	fill in the blank 3
Fourth Year	fill in the blank 4
Total present value	$fill in the blank 5

b. By using the present value of an annuity of $1 table in Exhibit 7. Round to the nearest whole dollar. fill in the blank 1 of 1

c. Why is the present value of the four $210,000 cash receipts less than the $840,000 to be received in the future? The present value is less due to

deflationinflationthe compounding of interest

over the 4 years.