The present value of an annuity is :
[tex]P=PMT\times\frac{1-\frac{1}{(1+r)^n}}{r}[/tex]where :
P = Present Value
PMT = Periodic payments
r = interest rate
n = number of periodic payments
From the problem, we have :
PMT = $13,500
r = 6% or 0.06
n = 9 years = 9 periodic payments
The present value is :
[tex]\begin{gathered} P=13500\times\frac{1-\frac{1}{(1+0.06)^9}}{0.06} \\ P=91822.846 \end{gathered}[/tex]The answer is $91,822.85
