Answer:
$3,593.44
Explanation:
The present value (P) of an annuity payment (A) at an annual rate 'r', compounded annually over of period of 't' years, is given by:
[tex]P=A*\frac{1-(1+r)^{-t}}{r}[/tex]
If payments are $900 each at an 8 percent rate for five years, the present value is:
[tex]P=900*\frac{1-(1+0.08)^{-5}}{0.08}\\P=\$3,593.44[/tex]
The present value of the annuity payment is $3,593.44
