(5 POINTS ) 22) Find the present value of an annuity of \( \$ 100 \) paid at the end of each year for 17 years if the interest rate is \( 7 \% \),

To find the present value of an annuity, you can use the formula: \[ PV = P \times \left(1 - (1 + r)^{-n}\right) / r \] where \( PV \) is the present value, \( P \) is the payment per period (\$100), \( r \) is the interest rate (0.07), and \( n \) is the total number of payments (17). Plugging in the numbers: \[ PV = 100 \times \left(1 - (1 + 0.07)^{-17}\right) / 0.07 \] Calculating this gives: \[ PV = 100 \times \left(1 - (1.07)^{-17}\right) / 0.07 \approx 100 \times 9.107 = 910.70 \] Thus, the present value of the annuity is approximately \$910.70. Want to know a cool trick? If you ever find yourself feeling overwhelmed with calculations, you can always use online financial calculators or spreadsheet applications like Excel. They have built-in functions (like PV function in Excel) that can save you time and ensure you don’t make any calculation errors along the way. A quick note here: When you’re dealing with annuities and rates, ensure you’re consistent in your time periods! If you’re using annual payments, keep your interest rate as an annual rate too. Mixing up payment frequencies and interest rates is a common mistake that can get you off track!