https://file.aiquickdraw.com/mathbot/file/17276588738412ehnchij.jpg

The formula given in the image for calculating the present value of an annuity is:

\[
P = m \left[ \frac{1 - \left( 1 + \frac{r}{n} \right)^{-nt}}{\frac{r}{n}} \right]
\]

Where:
- $ P $ = present value of the annuity
- $ m $ = periodic payment ($50)
- $ r $ = annual interest rate (7% or 0.07)
- $ n $ = number of compounding periods per year (12 for monthly compounding)
- $ t $ = number of years (5)

Let's plug these values into the formula and calculate $ P $:

- $ m = 50 $
- $ r = 0.07 $
- $ n = 12 $
- $ t = 5 $

I'll calculate the result for you.The present value of the annuity is approximately **$2,525.10**.

Would you like more details or have any further questions? 

Here are 5 related questions to expand your understanding:
1. How does increasing the interest rate affect the present value of an annuity?
2. What happens to the present value if the number of years (t) increases?
3. How is the present value of an annuity different from the future value of an annuity?
4. What would the result be with quarterly or annual compounding instead of monthly?
5. How does the number of compounding periods (n) impact the calculation?

**Tip:** Always round your final answer to the nearest cent when dealing with monetary values in financial formulas.

Use a calculator to evaluate the present value of an annuity formula P = m * [ (1 - (1 + r/n)^(-nt)) / (r/n) ] for the values of the variables m, r, and t (respectively). Assume n = 12. Given values are: $50; 7%; 5 years.

Learn how to calculate the present value of an annuity for $50 monthly payments at a 7% annual interest rate over 5 years using the formula P = m * [ (1 - (1 + r/n)^(-nt)) / (r/n) ]. The solution involves understanding financial mathematics, exponential functions, and annuity concepts. Suitable for college-level financial math courses.

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