Find out the future value of annuity at the end of five year, Financial Management

Assignment Help:

Goral is required to pay five equal annual payments of Rs. 10,000 each in his deposit account that pays 10% interest per year. Find out the future value of annuity at the end of five years.

Present Value Concept

After going through the process of determining the FV present money or a present series, now the process of finding out the Present Value (PV) of a future sum or a future series can be discussed. This process is in fact the reverse of compounding technique and is known as the discounting technique. As there are FVs of sums invested now, calculated as per the compounding techniques, there are also the present values of a cash flow scheduled to occur in future. The present value is calculated by discounting technique by applying the following equation.

PV= FV/ (1 + r) n


Related Discussions:- Find out the future value of annuity at the end of five year

Measurement of interest rate risk, Changes in the bond value is inversely ...

Changes in the bond value is inversely related to the change in the interest rates. If an investor holds a long bond position, he would incur loss if the in

Value of conversion benefits, Having seen the measure used for ...

Having seen the measure used for analyzing the convertible bonds, let us now examine the merits and demerits of convertible bonds, and why or wh

What do you mean by financial leverage, Q. What do you mean by Financial Le...

Q. What do you mean by Financial Leverage? Financial Leverage: - The financial leverage perhaps defined as the tendency of the residual net profit to vary disproportionately wi

What do you mean by synergy, Q. What do you mean by synergy? Synergy: s...

Q. What do you mean by synergy? Synergy: synergy refers to the greater combined value of merged firms than the sum of the values of individual units. It is something like one p

What is deferred incomes, Q. What is Deferred Incomes? Deferred incomes...

Q. What is Deferred Incomes? Deferred incomes are incomes received in advance before supplying goods or services. They represent funds received by a firm for which it has to su

Difference between transaction and translation risk, Question: You have...

Question: You have been appointed as the head of the treasury of Platza International, an automobile firm with many subsidiaries abroad. The management of Platza International

Liquidity of a company, Eco Tyre Ltd. (ETL) - incorporated in year 2003 and...

Eco Tyre Ltd. (ETL) - incorporated in year 2003 and entered into automobile tyre manufacturing business by introducing a new tire manufacturing technology. Over the years, ETL has

Describe the money market products, Question 1 Under a hire purchase de...

Question 1 Under a hire purchase deal structured by X Finance Ltd. for Y Corporation, the finance company has offered to finance the purchase of equipment that costs Rs. 200 la

Section C, Honey Well company is contemplating to liberalize its collectio...

Honey Well company is contemplating to liberalize its collection effort. It''s present sales are 1000000 and it''s average collection period is 30 days, it''s expected variable c

Foreign and domestic investments, What risks are associated with direct for...

What risks are associated with direct foreign investment? How do these risks differ from those encountered in domestic investment?

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