Each payment of an annuity due is compounded for one compounded for one Select- -Select- v period, so the future value of an annuity due is equal to the future value of an ordinary annuity v period. The equation is: FVAdue=FVAordinary (1 + I) The present value of an ordinary annuity, PVAN, is the value today that would be equivalent to the annuity payments (PMT) received at fixed intervals over the annuity period. The equation is: 1- (1+1)N PVAN= PMT Each payment of an annuity due is discounted for one -Select- period, so the present value of an annuity due is equal to the present value of an ordinary annuity multiplied by (1 + I). The equation is: DVA זדת
Each payment of an annuity due is compounded for one compounded for one Select- -Select- v period, so the future value of an annuity due is equal to the future value of an ordinary annuity v period. The equation is: FVAdue=FVAordinary (1 + I) The present value of an ordinary annuity, PVAN, is the value today that would be equivalent to the annuity payments (PMT) received at fixed intervals over the annuity period. The equation is: 1- (1+1)N PVAN= PMT Each payment of an annuity due is discounted for one -Select- period, so the present value of an annuity due is equal to the present value of an ordinary annuity multiplied by (1 + I). The equation is: DVA זדת
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:Each payment of an annuity due is compounded for one
compounded for one Select-
-Select-
v period, so the future value of an annuity due is equal to the future value of an ordinary annuity
v period. The equation is:
FVAdue=FVAordinary (1 + I)
The present value of an ordinary annuity, PVAN, is the value today that would be equivalent to the annuity payments (PMT) received at fixed intervals over the annuity
period. The equation is:
1-
(1+1)N
PVAN= PMT
Each payment of an annuity due is discounted for one -Select-
period, so the present value of an annuity due is equal to the present value of an ordinary annuity
multiplied by (1 + I). The equation is:
DVA
זדת
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