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

What is debentures, Q. What is Debentures? Debentures a debenture is an...

Q. What is Debentures? Debentures a debenture is an instrument issued by the company acknowledge its debts to its holders . it is also an important method of raising long terms

Explain calculation firm risk of a capital budgeting project, Explain how t...

Explain how to measure the firm risk of a capital budgeting project. The firm risk of a capital budgeting project calculates the impact of adding a new project to the existing pr

Free cash flow, Free Cash Flow Free cash flow presents the amount of ca...

Free Cash Flow Free cash flow presents the amount of cash generated by the existing operations of a corporation and that is not needed for reinvestment in new projects in the f

Compounding or future value concept, Compounding or Future Value Concept: -...

Compounding or Future Value Concept: - Under this process of compounding the future worth of all cash inflows at the end of the time horizon at a particular rate of interest are fo

Operating cyle, discuss the applicabilty of the operating cycle in a vegeta...

discuss the applicabilty of the operating cycle in a vegetable growing business

Principle of opportunity cost, Suppose you have recently been contracted as...

Suppose you have recently been contracted as a financial consultant to a London-based engineering company, Alpha Products Plc. The company uses three components as part of their pr

Determine interest coverage ratio, Q. Determine Interest coverage ratio? ...

Q. Determine Interest coverage ratio? Current interest coverage ratio = 7000/500 = 14 times Increased profit before interest and tax = 7000 × 1.12 = $7.84m Increased inte

Statement of total comprehensive income, At 31 July 2010 this instrument me...

At 31 July 2010 this instrument meets the definition of a derivative: Small or no initial investment. Its value is dependent on an underlying economic item; exchange ra

Price of the share as per gordon''s model, Considering the following inform...

Considering the following information, what is the price of the share as per Gordon's Model?  Details of the Company

Defien contractual savings institutions, Contractual savings institutions ...

Contractual savings institutions Contractual savings institutions obtain funds at periodic intervals on a contractual basis. The industry is classified into two main groups ins

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