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  • Lesson 3: FM Review Fall 2013

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    Harrison Richards
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    The document discusses different types of continuous annuities including those with payments that vary in arithmetic or geometric progression. It provides formulas for calculating annuities when payments increase or decrease at a fixed amount or ratio over time. Specifically, it presents the key formula to memorize for a perpetuity with payments varying in geometric progression.

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    Act Sci

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    Lesson 3 Notes

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    The document discusses different types of continuous annuities including those with payments that vary in arithmetic or geometric progression. It provides formulas for calculating annuities when payments increase or decrease at a fixed amount or ratio over time. Specifically, it presents the key formula to memorize for a perpetuity with payments varying in geometric progression.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PDF, TXT or read online from Scribd
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    Download as pdf or txt
    25 views2 pages

    Lesson 3: FM Review Fall 2013

    Uploaded by

    Harrison Richards
    The document discusses different types of continuous annuities including those with payments that vary in arithmetic or geometric progression. It provides formulas for calculating annuities when payments increase or decrease at a fixed amount or ratio over time. Specifically, it presents the key formula to memorize for a perpetuity with payments varying in geometric progression.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pdf or txt
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    FM Review Fall 2013

    Lesson 3
    Continuous Annuity

    Payment varying in arithmetic progression Payments are increasing or decreasing at a fixed amount. ( )

    P = amount of first payment (at time 1) Q = amount of increase or decrease in the payments

    More formulas: *Can be used only when .

    *Can be used only when

    &

    FM Review Fall 2013

    For perpetuity (at time 1):

    Payment varying in geometric progression Payments are increasing or decreasing at a fixed ratio.

    *This is the only formula you have to memorize in this part.

    Continuous Varying Annuities Payments are increasing or decreasing continuously at a fixed amount. ( ) *Not popular in FM

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