Find the present value of an ordinary annuity which has payments of $2200 per year for 12 years at 8% compound annually 

To find the present value of an ordinary annuity, we use the following formula:

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

Where:
- $ PV $ is the present value of the annuity.
- $ P $ is the payment per period ($2200).
- $ r $ is the interest rate per period (8% or 0.08).
- $ n $ is the total number of periods (12 years).

Let's plug in the values:

\[
PV = 2200 \times \left( \frac{1 - (1 + 0.08)^{-12}}{0.08} \right)
\]

I'll calculate this for you.The present value of the ordinary annuity is approximately **$16,579.37**.

Do you want more details on this calculation, or have any questions?

Here are 5 related questions to further explore:
1. What would the present value be if the interest rate were 10%?
2. How does increasing the number of years affect the present value?
3. What is the future value of this annuity after 12 years?
4. How does the formula for the present value of an annuity differ from that of a perpetuity?
5. What happens to the present value if payments are made semi-annually instead of annually?

**Tip:** An ordinary annuity assumes that payments are made at the end of each period, while an annuity due assumes payments at the beginning.

Find the present value of an ordinary annuity which has payments of $2200 per year for 12 years at 8% compound annually.

Learn how to calculate the present value of an ordinary annuity with $2200 annual payments for 12 years at an 8% interest rate. This solution covers the formula for present value and key concepts related to the time value of money, suitable for students in Grades 10-12.

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