Complete the following for the present value of an ordinary annuity. (Use Table 13.2.) Note: Do not round intermediate calculations. Round your answer to the nearest cent.

\begin{tabular}{|c|c|c|c|c|}
\hline
\begin{tabular}{l}
Amount of \\
annuity expected
\end{tabular} &
Payment &
Time &
Interest rate &
\begin{tabular}{l}
Present value (amount \\
needed now to invest \\
to receive annuity)
\end{tabular} \\
\hline
15,100 &
Quarterly &
5 years &
\begin{tabular}{l}
[tex]$\%$[/tex]
\end{tabular} &
\\
\hline
\end{tabular}



Answer :

Let's calculate the present value of an ordinary annuity step-by-step.

### Step-by-Step Solution:

1. Identify the given values:
- Annuity amount (PMT): [tex]\( 15,100 \)[/tex] USD
- Payment frequency: Quarterly (4 payments per year)
- Time: 5 years
- Annual interest rate: 5%

2. Calculate the number of periods (n):

Since the payments are quarterly, there are 4 payment periods in one year.
[tex]\[ n = 5 \text{ years} \times 4 \text{ quarters per year} = 20 \text{ periods} \][/tex]

3. Calculate the rate per period (r):

The annual interest rate is 5%, which needs to be converted to a quarterly rate.
[tex]\[ r = \frac{5\%}{4} = \frac{5}{100 \times 4} = 0.0125 \text{ (or 1.25% per quarter)} \][/tex]

4. Use the present value of an ordinary annuity formula:
[tex]\[ PV = PMT \times \left( \frac{1 - (1 + r)^{-n}}{r} \right) \][/tex]

5. Substitute the given values into the formula:
[tex]\[ PV = 15,100 \times \left( \frac{1 - (1 + 0.0125)^{-20}}{0.0125} \right) \][/tex]

6. Calculate the factor inside the parentheses first:
[tex]\[ 1 - (1 + 0.0125)^{-20} \approx 1 - 0.75941 \approx 0.24059 \][/tex]

7. Divide by the rate per period:
[tex]\[ \frac{0.24059}{0.0125} \approx 19.2472 \][/tex]

8. Multiply by the annuity amount:
[tex]\[ PV = 15,100 \times 19.2472 \approx 290,832.52 \][/tex]

### Final Answer:
The present value (amount needed now to invest to receive the annuity) is:
[tex]\[ \boxed{265,749.67 \text{ USD}} \][/tex]

This is the amount you would need to invest now at a 5% annual interest rate, compounded quarterly, to receive quarterly payments of $15,100 for 5 years.