Present value of an annuity

Determine the present value of $$220,000$ to be received at the end of each of $4$ years, using an interest rate of $10\%,$ compounded annually, as follo

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

First year $$

Second Year $$

Third Vear $$

Fourth Vear $$

Total present value

$

$\frac{?}{\text{b}\text{a}\text{r}}($$$)$

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

$$

c$.$ Why is the present value of the four $$220,000$ cash receipts less than the $$880,000$ to be received in the future?

The present value is less due to the compounding of interest $$ over the $4$ years.