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Present value of an annuity Determine the present value of $200,000 to be received at the end of each of 4 years, using an interest

Present value of an annuity

Determine the present value of $200,000 to be received at the end of each of 4 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.

First year $

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.

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