Single Cash Flow PV = FV (1+r)n Annuity : FV = PV(1+r) n (1+r)" − 1 (1+r)n−1 * FVA = PMT FVAD = PMT (1+r) r PVA = PMT r 1 1 1 (1+r)n PVAD = PMT (1+r)*(1+r) r r r(1+r)n PMT = PV (1+r)n-1 Perpetuities PVP = PMT r
Single Cash Flow PV = FV (1+r)n Annuity : FV = PV(1+r) n (1+r)" − 1 (1+r)n−1 * FVA = PMT FVAD = PMT (1+r) r PVA = PMT r 1 1 1 (1+r)n PVAD = PMT (1+r)*(1+r) r r r(1+r)n PMT = PV (1+r)n-1 Perpetuities PVP = PMT r
Chapter4: Time Value Of Money
Section4.12: Uneven, Or Irregular, Cash Flows
Problem 1ST
Related questions
Question
Rebecca would like to set up an account to supplement her parents’ retirement income for the next 15 years. (a) If the account earns 7.2 percent compounded monthly., how much will Rebecca have to deposit today so that her parents are paid $150 at the end of each month? (b) How much would she have to deposit if her parents wanted to receive the $150 payment at the beginning of each month? (LO 4-3 & 4-5)
Transcribed Image Text:Single Cash Flow
PV =
FV
(1+r)n
Annuity
:
FV = PV(1+r) n
(1+r)" − 1
(1+r)n−1 *
FVA = PMT
FVAD = PMT
(1+r)
r
PVA = PMT
r
1
1
1
(1+r)n
PVAD = PMT
(1+r)*(1+r)
r
r
r(1+r)n
PMT = PV
(1+r)n-1
Perpetuities
PVP =
PMT
r
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