Present Value of an Annuity Determine the present value of $120,000 to be received at the end of each of four years, using an interest rate of 6%, compounded annually, as follows: a. By successive computations, using the present value of $1 table in Exhibit 5. Round to the nearest whole dollar. First year X Second Year Third Year Fourth Year Total present value 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 $120,000 cash receipts less than the $480,000 to be received in the future? The present value is less due to the compounding of interest over the 4 years.