Present value of an annuity Determine the present value of $240,000 to be received at the end of each of 4 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. $226,416 V First year Second Year Third Year Fourth Year Total present value 213,600 201,508 X 190,102 831,626 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 $240,000 cash receipts less than the $960,000 to be received in the future? The present value is less due to the compounding of interest over the 4 years.

Present value of an annuity Determine the present value of $240,000 to be received at the end of each of 4 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. 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 $240,000 cash receipts less than the $960,000 to be received in the fucure? The present value is less due to over the 4 years