Present Value of Ordinary Annuities

Tags: #Economics

Equation

$$P = R \frac{1 - (1+r)^{-n}}{i} \\ R = P \frac{i}{1 - (1+r)^{-n}}$$

Latex Code

                                 P = R \frac{1 - (1+r)^{-n}}{i} \\
R = P \frac{i}{1 - (1+r)^{-n}}

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Introduction

Equation



Latex Code

            P = R \frac{1 - (1+r)^{-n}}{i} \\
            R = P \frac{i}{1 - (1+r)^{-n}}

Explanation

Latex code for the Present Value of Ordinary Annuities. I will briefly introduce the notations in this formulation. The payment is made at the END of the period.

  • : Present Value
  • : Payment made in each period
  • : Rate per period, usually i=r/m
  • : Total number of times compounded, n=mt

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