Question: Tommy John is going to receive $1,000,000 in three years. The current market rate of interest is 10%. a. Using the present value of $1

Tommy John is going to receive $1,000,000 in three years. The current market rate of interest is 10%.

a. Using the present value of $1 table in Exhibit 4, determine the present value of this amount compounded annually.

b. Why is the present value less than the $1,000,000 to be received in the future?


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