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

Calculate liquidity and balance sheet, Jaedan Industries has the following ...

Jaedan Industries has the following account balances as of December 31, 2010.  The firm's dividend payout ratio is 25% and the tax rate is 34%.  The firm's stock price on December

International accounting, the role of international accounting toward promo...

the role of international accounting toward promotion of generally accepted accounting principle

State the account title that is normally used to report, The following item...

The following items represent liabilities on a firm's balance sheet: a. An amount of money owed to a supplier based on the terms 2/20, n/40, for which no note was executed. b. An a

Selective inventory control, ABC Analysis: ABC that is Always Better Co...

ABC Analysis: ABC that is Always Better Control analysis is an application of the principle of 'Management by Exception' to the field of inventory control. If we seem at the in

IRR, what managers should know about internal rate of return( IRR) and wh

what managers should know about internal rate of return( IRR) and why

Compute debt-equity ratio., Allie forms Broadbill Corporation by transferr...

Allie forms Broadbill Corporation by transferring land (basis of $125,000, fair market value of $775,000), which is subject to a mortgage of $375,000. One month prior to incorporat

Prepare journal entries to record the transactions, On January 1, 2010, And...

On January 1, 2010, Anderson Corporation had 60,000 shares of $1 par value common stock issued and outstanding. During the year, the following transactions occurred: Mar. 1 Issued

Determine the npv of future cash flows, While many people know that Sonora,...

While many people know that Sonora, Mexico is a beautiful vacation spot, it is also a large furniture manufacturing location in North America. Guillermo Navallez made furniture for

How can a person tell whether an entry to an expense account, How can a per...

How can a person tell whether an entry to an expense account is payment for a legitimate expenditure or a means of concealing a theft of cash?

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