Formula of annuity, Financial Accounting

In common terms the future value of an annuity or regular annuity is specified by the subsequent formula:

FVAn = A (1 + k )n -1 + A (1 + k )n - 2 + ... + A   ................................Eq(6)

1133_Formula of annuity.png

A [((1 + k)n - 1)/k]

Future value of an annuity due:

FVAn(due) = A (1 + k )n + A (1 + k )n - 1 + ... + A(1 + k)   ................................Eq(6)

2093_Formula of annuity1.png....................................Eq(7)

= A [((1 + k)n - 1)/k] (1 + k)

Here FVAn = Future value of an annuity that has a duration of n periods

A   = Constant periodic cash flow;

 k = Interest rate per period;

n = duration of the annuity.

The term [((1 + k)n - 1)/k] is considered to as the future value interest factor for an annuity (FVIFAk,n). The value of its factor for some combinations of k and n are specified in the appendix at the end of this section.

Posted Date: 4/9/2013 2:34:34 AM | Location : United States







Related Discussions:- Formula of annuity, Assignment Help, Ask Question on Formula of annuity, Get Answer, Expert's Help, Formula of annuity Discussions

Write discussion on Formula of annuity
Your posts are moderated
Related Questions
On May 2, 1986, Hannah acquired residential real estate for $450,000. Of the cost, $100,000 was allocated to the land and $350,000 to the building. On January 20, 2013, the buildin

THE TRUSTEE IN BANKRUPTCY 1) Appointment of trustee The trustee is appointed: By the creditors by ordinary resolution, or By the committee of inspection, if so

Table on subsequent page lists 21 ratios being calculated by the Bombay Stock Exchange. Tick the board class to that each of the 21 ratios belongs to the blank columns of the Table

Motivation is said to be an internal state that energises an individual to engage in certain types of behaviours. This process is triggered when the individual experiences certain

Beginning balance 24,000 cash Sales 250,000 Gross profit 45% of sales Accounts receivable increase by 24,000 Accounts payable increased by 51,000 Inventory increased by 98,000 Sell

Illustration for preparing final accounts K Ltd established a branch in Arusha Tanzania on 1.1.X2, when Kshs 1 = TShs 15. PPE costing Kshs 800,000 were purchased on that day. I

1. This assignment is to be submitted as an individual assignment.  2. Marks will be deducted for poor quality presentation. For guidance on the requirements for the presentatio

Income statement2013 2012 2011 Net revenue 5,075,390.. 4,763,180.. 4,158,507 Cost of goods 1,377,242.. 1,297,102.. 1,134,966.. Gross profit 3,698,148.. 3,466,078.. 3,023,541 Total

Here is the income statement for Belding, Inc. BELDING Inc. Income statement for the year ended December 31, 2012 Sales $400,000 costs of goods sold 250,000 gross profit 150,000 ex

Q. Calculation of the change in finance costs? Past ACCA examiners have occupied inconsistent approaches regarding the calculation of the change in finance costs due to settlem