Final answer:
The present value of an ordinary annuity with 10 payments of $2,700 at an interest rate of 5.5% can be calculated using the annuity present value formula.
Step-by-step explanation:
The present value (PV) of an ordinary annuity can be calculated using the formula for the present value of an annuity due. The formula considers the number of payments, the amount of each payment, and the interest rate. To find the PV of an ordinary annuity with 10 payments of $2,700 at an interest rate of 5.5%, the formula is used:
PV = Pmt * [(1 - (1 + r)^-n) / r]
Where Pmt = payment amount, r = interest rate per period, and n = number of periods.
In this case, the calculation would be as follows:
PV = $2,700 * [(1 - (1 + 0.055)^-10) / 0.055]
This calculation will give us the present value of the annuity.