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

Franchise, gershwin coporation obtained afranchise fron sonic hedgeehog inc...

gershwin coporation obtained afranchise fron sonic hedgeehog inc .for a cash payment of $ 120000 on april 1,2010 . the franchise grants gershwin the right to sell certain product a

What is the present value of these future savings?, a) A company has 7000 o...

a) A company has 7000 obsolete toys carried in inventory at a manufacturing cost of $6 per unit. If the toys are reworked for $2 per unit, they could be sold for $3 per unit. If th

Calculate the profitability of company - investment decision, In no more th...

In no more than one typed page, provide a statement of your decision to invest or not invest in this company's stock based on your interpretation of the company's long-term prospec

What is capital expenditure, Calculat capital expenditure, How to define Ca...

Calculat capital expenditure, How to define Capital expenditure This is kind of expenditure on fixed assets like as plant or equipment, the cost of which is spread over several

Personal financial specialist, Personal Financial Specialist (PFS) - CERTIF...

Personal Financial Specialist (PFS) - CERTIFIED PUBLIC ACCOUNTANT who specializes in PERSONAL FINANCIAL PLANNING and completes a series of requirements which compriseexperience, ed

What is the required rate of return, a) Company X is expected to maintain a...

a) Company X is expected to maintain a constant 7% growth rate in their dividends, indefinitely. If the company has a dividend yield of 4%, what is the required return on their sha

Writing assignment, you are aceo of acme ,inc located in united states .you...

you are aceo of acme ,inc located in united states .you use the discounted pay back period method and accept all projects that pay back in hree years.a project that will cost 5,500

What is accounting, What is accounting? Accounting is concerned with an...

What is accounting? Accounting is concerned with analysing, collecting as well as communicating financial information. Purpose is to help people who use this info to make more

Law, define law including contract and bankruptcy

define law including contract and bankruptcy

Financial break , OCF 218200 will result in a zero net present value for th...

OCF 218200 will result in a zero net present value for the project. The FC 329000 and CM 216.4 per unit. Financial break even?

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