Formula of annuity, Financial Accounting

Assignment Help:

In common terms the future value of an annuity or regular annuity is specified by the subsequent formula:

FVAn = A (1 + k )n -1 + A (1 + k )n - 2 + ... + A   ................................Eq(6)

1133_Formula of annuity.png

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

Future value of an annuity due:

FVAn(due) = A (1 + k )n + A (1 + k )n - 1 + ... + A(1 + k)   ................................Eq(6)

2093_Formula of annuity1.png....................................Eq(7)

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

Here FVAn = Future value of an annuity that has a duration of n periods

A   = Constant periodic cash flow;

 k = Interest rate per period;

n = duration of the annuity.

The term [((1 + k)n - 1)/k] is considered to as the future value interest factor for an annuity (FVIFAk,n). The value of its factor for some combinations of k and n are specified in the appendix at the end of this section.


Related Discussions:- Formula of annuity

Capital recovery factor, Equation illustrates the relationship in between P...

Equation illustrates the relationship in between PVA n , A, K and n. So manipulating this a bit: We find that A = PVA n [(k (1 + k) n )/((1 +k) n - 1)] [(k (1 + k) n )/(

Writing a dissertation, I want to do a custom dissertation on IAS 40 invest...

I want to do a custom dissertation on IAS 40 investment property which needs to include a brief outline, positive as well as negative international critique with respect to the sta

Essay, Can you help me with that?

Can you help me with that?

How should i record the transaction on the com''s cash record, I am working...

I am working on a bank reconciliation problem. How should I record the following transaction on the company's cash record? (10/31/13 Bank Rec) A two month, 8%, $1350 customer's not

Paid 5, what is the explanation?

what is the explanation?

Antitrust laws, Antitrust Laws - Assignment Help One of the foundations...

Antitrust Laws - Assignment Help One of the foundations of business within the United States is the freedom to compete in the marketplace; however, certain laws have been creat

Make journal entries required to dispose off, make journal entries require...

make journal entries required to dispose off over or under applied manufacturing overhead assuming it is allocated among work in process, finished goods and cost of goods sold ba

Prepare cash budget for three months, QUESTION 1: P A RT A You...

QUESTION 1: P A RT A You  are  given with  the  following information relating to Rooney PLC . The accountant is currently developing the budget for the next three mo

Fair market value, Stepped Up Basis -Usually, the foundation of property ac...

Stepped Up Basis -Usually, the foundation of property acquired by INHERITENCE, BEQUEST or device from a DECENDANT is the FAIR MARKET VALUE of the property on the date of decendant'

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