1. **Problem Statement:** Find the present value of an ordinary annuity paying 600 per year for 6 years at an annual interest rate of 6% compounded annually. 2. **Formula:** The present value $PV$ of an ordinary annuity is given by: $$PV = P \times \frac{1 - (1 + r)^{-n}}{r}$$ where: - $P$ = payment per period - $r$ = interest rate per period - $n$ = number of periods 3. **Identify values:** - $P = 600$ - $r = 0.06$ - $n = 6$ 4. **Calculate:** $$PV = 600 \times \frac{1 - (1 + 0.06)^{-6}}{0.06}$$ 5. Calculate $(1 + 0.06)^{-6}$: $$1.06^{-6} = \frac{1}{1.06^6} \approx \frac{1}{1.418519} \approx 0.70496$$ 6. Substitute back: $$PV = 600 \times \frac{1 - 0.70496}{0.06} = 600 \times \frac{0.29504}{0.06}$$ 7. Simplify: $$\frac{0.29504}{0.06} \approx 4.9173$$ 8. Final present value: $$PV = 600 \times 4.9173 = 2950.38$$ **Answer:** The present value of the annuity is approximately **2950.38**.