Present value of an annuity Determine the present value of $190,000 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. Year Present Value First year $fill in the blank 1 Second Year fill in the blank 2 Third Year fill in the blank 3 Fourth Year fill in the blank 4 Total present value $fill in the blank 5 b. By using the present value of an annuity of $1 table in Exhibit 7. Round to the nearest whole dollar. fill in the blank 1 of 1 c. Why is the present value of the four $190,000 cash receipts less than the $760,000 to be received in the future? The present value is less due to over the 4 years. ?

Present value of an annuity Determine the present value of $190,000 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. Year Present Value First year $fill in the blank 1 Second Year fill in the blank 2 Third Year fill in the blank 3 Fourth Year fill in the blank 4 Total present value $fill in the blank 5 b. By using the present value of an annuity of $1 table in Exhibit 7. Round to the nearest whole dollar. fill in the blank 1 of 1 c. Why is the present value of the four $190,000 cash receipts less than the $760,000 to be received in the future? The present value is less due to over the 4 years. ?

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

ChapterA3: Time Value Of Money

Section: Chapter Questions

Problem 12E

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