Solve for the FVA or PVA value of the following annuity DUEs; Solve for… Payment amt #Pmts/year years Annual rate Answer; Future Value $ 12,000.00 1 20 8.00% Present Value $ 60,000.00 1 20 8.00% Future Value $ 1,000.00 12 20 12.00%
Solve for the FVA or PVA value of the following
| Solve for… | Payment amt | #Pmts/year | years | Annual rate | Answer; |
| $ 12,000.00 | 1 | 20 | 8.00% | ||
| $ 60,000.00 | 1 | 20 | 8.00% | ||
| Future Value | $ 1,000.00 | 12 | 20 | 12.00% | |
| Present Value | $ 10,000.00 | 12 | 20 | 12.00% |
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Future Value
Future Value is the value which is measured at a specified date at a given interest rate, it can be calculated over a lumpsum period of payment done on annuity basis.
If Lumpsum amount invested then Future value = Present Value
x (1+r)^n
Whereas if payment made on annuity basis then ` = Cash Payment on periodic Basis x {(1+r)^n-1)/r}
Here r is the interest rate
and n is the number of payment
Present Value - present value can be calculated as = 1/(1+r)^1 +1/(1+r)^2 + 1/(1+r)^3 + 1/(1+r)^n
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