Math of ivestment (annuity due and deferred payments)
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The document discusses annuities and present value calculations. It provides examples of calculating the present value of annuity payments made at the beginning of periods, as well as examples of calculating future and present values of investments made at consistent intervals over multiple years with compound interest. It also includes the formula for the present value of a deferred annuity.
Math of ivestment (annuity due and deferred payments)
- 1. Annuity Due a sequence of equal payments that are made at the beginning of the period...
- 2. the present value of an annuity due, or its value on the day of the first payments, is the sum of the present values of the payments of the payments.
- 4. Mr. Abad invested P1000 per month for 5 years at 9% compounded monthly. What is the cash equivalent of the 5-year deposits?
- 7. An investment of P200 is made at the beginning of each year for 10 years. If interest is worth 6%, how much will the investment be worth at the end of 10 years?
- 8. :
- 9. The beneficiary of a life insurance policy may take P10000 cash or 10 equal annual payments, the first is to be made immediately. What is the annual payments if money is worth 6%?
- 10. ::
- 11. A student wants to have P2500 for a trip after graduation 4 years from now. How much she invest at the beginning of each year starting now if she gets 5% compounded annually on her savings?
- 14. Rate of Annuity Due
- 17. Formula to be used:
- 18. Sample Problem: Find the present value of a deferred annuity of P500 a year for ten years that is deferred 5 years. Money is worth 6%.
- 19. Sample Problem: Find S(def): If: R=P300 d=6 years n=8 i=7%