Present Value and Future Value of Annuities
Not what you're looking for?
How would a manager calculate present value and future value for single amounts, annuities, and uneven streams of cash flow.
Purchase this Solution
Solution Summary
The solution determines the present value and future value of annuities.
Solution Preview
1. The present value for a single amount:
----------------------------------------------------------------------------------------------------------------------------------
The present Value for a single amount is an amount today that is equivalent to a future payment, or series of payments, that has been discounted by an appropriate interest rate and is calculated as:
PV = FV
----------
(1 + i)^n
Where:
PV = Present Value
FV = Future Value
i = Interest Rate Per Period
n = Number of Compounding Periods
2. The present value for an annuity:
-----------------------------------------------------------------------------------------------------------------------------------
Annuities are defined as being a stream of equal cash flows into the future at evenly spaced intervals. The Present Value of an Annuity (PVoa) is the value of a stream of expected or promised future payments that have been discounted to a single equivalent value today. The Present Value ...
Purchase this Solution
Free BrainMass Quizzes
Marketing Research and Forecasting
The following quiz will assess your ability to identify steps in the marketing research process. Understanding this information will provide fundamental knowledge related to marketing research.
Lean your Process
This quiz will help you understand the basic concepts of Lean.
Balance Sheet
The Fundamental Classified Balance Sheet. What to know to make it easy.
Accounting: Statement of Cash flows
This quiz tests your knowledge of the components of the statements of cash flows and the methods used to determine cash flows.
IPOs
This Quiz is compiled of questions that pertain to IPOs (Initial Public Offerings)