To calculate the present value (PV) of an annuity, we use the following formula for the present value of an ordinary annuity:

$PV = P \times \left(1 - (1 + r)^{-n}\right) \div r$

Where:

• $P$ is the payment per period (in this case, $10,300).
• $r$ is the interest rate per period (4% or 0.04 in decimal).
• $n$ is the number of periods (35 years).

Substituting the values into the formula:

$PV = 10,300 \times \left(1 - (1 + 0.04)^{-35}\right) \div 0.04$

Now, let's calculate step-by-step:

1. First, compute $1 + r = 1 + 0.04 = 1.04$.
2. Then, compute $(1.04)^{-35}$.
3. Subtract this value from 1.
4. Multiply by the payment $P = 10,300$.
5. Finally, divide by the interest rate $r = 0.04$.

Let me calculate that for you.The present value of the annuity, rounded to the nearest cent, is $192,245.52.

Would you like further details or have any other questions?

Here are 5 related questions to expand on this concept:

1. How would the present value change if the interest rate was higher?
2. What is the future value of this annuity at the end of 35 years?
3. How does inflation affect the real value of the annuity payments over time?
4. How would the calculation change if the payments were made monthly instead of annually?
5. What is the impact of taxes on the present value of the annuity?

Tip: When comparing investment options, always consider both the interest rate and the time period to get an accurate present value.