Formula of annuity, Financial Accounting

Assignment Help:

In common terms the present value of a regular annuity may be shown as given below:

PVNn = A/(1 + k) + A/(1 + k)2+ ..................+ A/(1 + k)N

= A (1/(1 + k) + 1/(1 + k)2+ ..................+ 1/(1 + k)N)

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

In case of annuity due:

PVAn (due ) = A [(1 + k)n  - 1)/(k (1 + k)n)] (1 + k)   ...........................Eq(12)

Here PVAn = Present value of an annuity that has a duration of n periods;

A = Constant periodic flows and k = discount rate


Related Discussions:- Formula of annuity

Credit reference agencies and credit scoring, Q. Credit Reference Agencies ...

Q. Credit Reference Agencies and Credit Scoring ? A several organisations example Dun & Bradstreet and Standard & Poor provide credit scores and ratings for companies. These ma

Illustrations of retained profits brought forward, Illustrations of retaine...

Illustrations of retained profits brought forward H Ltd acquired 75% of the ordinary shares of S Ltd since S Ltd was incorporated. The Summarized income statement for the two c

Various types of accounting changes can affect the financial, Various types...

Various types of accounting changes can affect the financial statements of a business enterprise differently. Assume that the following list describes changes that have a material

Versions of roi, A huge number of variations of ROT are determined in pract...

A huge number of variations of ROT are determined in practice, based upon how "Investment" and "Return" are explained "Investment" may be explained to comprise any of the subsequen

Treatment of cash flow - gaap & fasb, The appropriate treatment of Cash flo...

The appropriate treatment of Cash flow in respect of the following items as per US GAAP & FASB - (230-10)  1. Receipt of Insurance settlement proceeds of $2 mill. From an intern

Impairment of Long-lived assets, How to calculate fair value of long-lived ...

How to calculate fair value of long-lived asset when the information about fair value is not available?

Permanent accounts would not include in accounts, Permanent accounts would ...

Permanent accounts would not include a interest expense b wage payable c prepaid rent d unearned revenues

Stock transactions, Brazil Corporation was organized on January 1, 1999. It...

Brazil Corporation was organized on January 1, 1999. It is authorized to issue 20,000 shares of 6%, $50 par value preferred stock, and 500,000 shares of common stock with a par val

Calculate the new interest rate and excel function pv, Continuing growth of...

Continuing growth of the company has required that we issue the company's corporate debt soon. As you know, in 6 months we plan to issue $10 million worth of 20-year corporate bond

How many units must the division sell each year, unit selling price of prod...

unit selling price of products= $40 unit variable expense of product= $24 Total fixed expenses= 560,000 avg op assets= 3,000,000 1)how many units must the division sell each yea

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