Final answer:
option c.
The Present Value (PV) of the annuity due can be calculated using the formula PV = Payment * (1 - (1 + interest rate)^-n) / interest rate. Plugging in the values from the question, the PV is $30,184.51.
Step-by-step explanation:
To calculate the Present Value (PV) of an annuity due, we need to use the formula:
PV = Payment * (1 - (1 + interest rate)^-n) / interest rate
Plugging in the values from the question, we have:
PV = 6,700 * (1 - (1 + 0.055)^-5) / 0.055 = $30,184.51
Therefore, the PV of the annuity due with 5 payments of $6,700 at an interest rate of 5.5% is $30,184.51, which is option c.