The query is regarding the denominator ie., 3.1698.
This value is obtained by looking at the 'Rate Table For the Present Value of an Ordinary Annuity of 1'. In the table we look at 10% column for 4th year. We get the answer as 3.1698
This can also be obtained manually by summing up (1/(1+0.1)1) + (1/(1+0.1)2) + (1/(1+0.1)3) + (1/(1+0.1)4) = 3.1698
This value shows present value of $ 1 invested each annually for 4 years at 10% discount rate. Hence the present value is 3.1698
Hope this helps. Please comment in case of any query regarding the solution.
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