Present Value of an Annuity

Determine the present value of $$180,000$ to be received at the end of each of four years, using an interest rate of $5\%,$ compounded annually, as follows:

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

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

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c$.$ Why is the present value of the four $$180,000$ cash receipts less than the $$720,000$ to be received in the future?

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