Explain compound value of an annuity, Financial Management

Assignment Help:

Q. Explain Compound Value of an Annuity?

Compound Value of an Annuity: - Annuity demotes to the periodic flows of equal amounts.

FV = A {(1+i)n - 1}/i

Instance: - Mr. X invests Rs. 2000 at the end of every year for 5 years into his account interest being 5% compounded annually. Conclude the amount of money he will have at the end of the 5th year.

FV = 2000 {(1+.05) 5- 1}/.05

FV = Rs. 11054


Related Discussions:- Explain compound value of an annuity

Solution to shareholders versus managers conflict, Solutions to this Confli...

Solutions to this Conflict In common, to make sure that managers act to the best interest of shareholders, the firm will: (a) Acquire Agency Costs in the form of:

Criticize the flexible exchange rate regime, Criticism from the viewpoint o...

Criticism from the viewpoint of the proponents of the flexible exchange rate regime. Economic agents can hedge exchange risk through forward contracts and other methods. They do

Straight line depreciation, Alger Corp wants to buy some construction equip...

Alger Corp wants to buy some construction equipment for $50,000, which has a useful life of 4 years with no salvage value. Alger uses straight-line depreciation. Alger has a tax ra

Cash flow analysis, Cash flow analysis helps an analyst to identify ...

Cash flow analysis helps an analyst to identify certain financial difficulties which cannot be identified using the above ratios.  A firm may be shown

Contemporary issues, What are the social and contemporary issues in financi...

What are the social and contemporary issues in financial management?

Demand and supply shocks, Demand and Supply Shocks The influence of the...

Demand and Supply Shocks The influence of the above macroeconomic factors on the economic performance can be analyzed by classifying their impact on the economy as a supply or

What are the drawbacks of the payback, The drawbacks of the payback approac...

The drawbacks of the payback approach are as follows - Payback ignores the overall profitability of a project by ignoring post payback cash flows. In the illustration above the

Chi square test as a test of independence, Chi Square Test as a Test of Ind...

Chi Square Test as a Test of Independence In real life decision making, managers often have to know whether the differences between the proportions observed from a number of sa

Value index numbers, Value Index Numbers The value index number as desc...

Value Index Numbers The value index number as described earlier is a combination index which combines price and quantity changes. Because of the difficulties experienced in pri

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd