1. **State the problem:** We need to find the present value of an ordinary annuity with payments of 420 made annually for 13 years at an interest rate of 6% compounded annually. 2. **Formula used:** The present value $PV$ of an ordinary annuity is given by: $$PV = P \times \frac{1 - (1 + r)^{-n}}{r}$$ where: - $P$ is the payment amount per period, - $r$ is the interest rate per period, - $n$ is the total number of payments. 3. **Identify values:** - $P = 420$ - $r = 0.06$ - $n = 13$ 4. **Calculate the present value:** $$PV = 420 \times \frac{1 - (1 + 0.06)^{-13}}{0.06}$$ 5. **Calculate $(1 + 0.06)^{-13}$:** $$1.06^{-13} = \frac{1}{1.06^{13}} \approx \frac{1}{2.197} \approx 0.4551$$ 6. **Substitute back:** $$PV = 420 \times \frac{1 - 0.4551}{0.06} = 420 \times \frac{0.5449}{0.06}$$ 7. **Simplify:** $$PV = 420 \times 9.0817 = 3814.31$$ 8. **Final answer:** The present value of the annuity is approximately **3814.31**.