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The problem in the image asks to find the **present value of an ordinary annuity** with the following details:

- Amount of deposit ($ m $): $500
- Frequency ($ n $): annually
- Interest rate ($ r $): 3% per year
- Time ($ t $): 15 years

### Formula for Present Value of an Ordinary Annuity:
\[
PV = P \times \frac{1 - (1 + r/n)^{-nt}}{r/n}
\]
Where:
- $ PV $ is the present value,
- $ P $ is the payment amount (deposit),
- $ r $ is the annual interest rate,
- $ n $ is the number of compounding periods per year (since it's annually, $ n = 1 $),
- $ t $ is the number of years.

Given:
- $ P = 500 $,
- $ r = 0.03 $,
- $ n = 1 $,
- $ t = 15 $.

Let's calculate the present value using these values.The present value of the ordinary annuity is approximately **$5968.97** (rounded to the nearest cent).

Would you like any further details or have any questions about this calculation?

Here are five related questions you might find helpful:
1. What is the difference between the present value and future value of an annuity?
2. How does increasing the interest rate affect the present value of an annuity?
3. How would the calculation change if the deposits were made monthly instead of annually?
4. What happens to the present value if the annuity lasts for 20 years instead of 15?
5. How can this formula be applied to other types of financial products like mortgages or loans?

**Tip:** When calculating the present value of an annuity, always ensure the interest rate and time periods match the compounding frequency for accurate results.

Find the present value of the ordinary annuity with a deposit of $500 annually, a 3% interest rate, and a time period of 15 years. Round your answer to the nearest cent.

This page provides a step-by-step solution to find the present value of an ordinary annuity. With annual deposits of $500, a 3% interest rate, and a time span of 15 years, this problem covers key concepts in finance like present value, compounding, and annuities.

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