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

Working capital cycle for a trade, Working capital cycle for a trade ...

Working capital cycle for a trade Inventories days (time inventories are held before being sold)   Plus   Trade receivables days (how long

Multiperiod compounding, where you deposit 1000dollars at the end of each y...

where you deposit 1000dollars at the end of each year for 4 years, what will be the amount of deposits at the end of each year if it is compounded at 12% semi-annually?

Equity, how do we measure equity in an orgarnisation

how do we measure equity in an orgarnisation

What to do to maximise profits of the company, What to do to maximise profi...

What to do to maximise profits of the company If you want to maximise profits, there are only two methods to do it. Either you decrease your expenses (also known as costs) or y

Need for working capital, Along with the fixed capital nearly every Small-S...

Along with the fixed capital nearly every Small-Scale industries requires working capital though the extent of working capital requirement differs in different businesses. Working

Calculate total development cost, A developer has purchased a commercial of...

A developer has purchased a commercial office site in Melbourne and wishes to develop a building which will be sold to an institutional owner before completion of the building.

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

Expected value application in finance - project evaluation, Project Evaluat...

Project Evaluation The expected value calculations are crucial to project investment decisions. The following example explains the use of probabilities in project evaluation.

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