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Present value of an annuity Determine the present value of $320,000 to be received...

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Accounting

Present value of an annuity
Determine the present value of $320,000 to be received at the end of each of 4 years, using an interest rate of 10%, compounded annuallow
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.
c. Why is the present value of the four $320,000 cash receipts less than the $1,280,000 to be received in the future?
The present value is less due to the compounding of interest over the 4 years.
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