The present value of an ordinary annuity paying $5000 annually for 6 years at an interest rate of 5.75% per annum compounded yearly is:

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Quizplus · Accepted Answer

The present value of an ordinary annuity is calculated using the formula: PV = PMT * [1 - (1 + r)^-n] / rwhere PMT is the annual payment, r is the interest rate, and n is the number of years.In this case, PMT = $5000, r = 5.75%, and n = 6. Plugging these values into the formula, we get:PV = $5000 * [1 - (1 + 0.0575)^-6] / 0.0575PV = $5000 * [1 - 0.7835] / 0.0575PV = $5000 * 0.2165 / 0.0575PV = $24,780.93Therefore, the present value of the annuity is $24,780.93.

The Present Value of an Ordinary Annuity Paying $5000 Annually