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eBook Calculator Present Value of an Annuity Determine the present value of $220,000 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 table in Exhibit 8. Round to the nearest whole dollar. First year 209,529 Second Year Third Year Fourth Year Total present value b. By using the present value table in Exhibit 10. Round to the nearest whole dollar. $ 780,119 X 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. Present Value of $1 at Compound Interest EXHIBITS Periods 4% 0.96154 0.92456 0.88900 0.85480 0.82193 0.79031 0.75992 0.73069 0.70259 0.67556 472% 0.95694 0.91573 0.87630 0.83856 0.80245 0.76790 0.73483 0.70319 0.67290 0.64393 5% 5%% 0.95238 0.94787 0.90703 0.89B45 0.863840.85161 0.82270 0.80722 0.78353 0.76513 0.74622 0.72525 0.71068 0.68744 0.67684 0.65160 0.64461 0.61763 0.61391058543 6% 0.94340 0.19000 0.83962 0.79209 0.74726 0.70496 0.66506 0.62741 0.59190 0.55839 6 % 0.93897 0.88166 0.82785 0.77732 0.72988 7% 0.93458 0.87344 0.81630 0.76290 0.71299 0.66634 0.62275 0.58201 0.54393 0.50835 10% 11% 0.90909 0.90090 0.82645 0.81162 0.75131 0.73119 0.68301 0.65873 0.62092 0.59345 0.56447 0.53464 0.51316 0.48166 0.46651 0.43393 0.42410 0.39092 0.38554035218 12% 0.89286 0.79719 0.71178 0.63552 0.56743 0.50663 0.45235 0.40388 0.36061 0.32197 13% 0.88496 0.78315 0.69305 0.61332 0.54276 0.48032 0.42506 0.37616 0.33288 0.29459 wa 0.64351 0.60423 0.56735 0.53273

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