Annuity Due

Annuity Due ()
Annuity in which periodic payment () is made
at the beginning of each payment interval
The term of an A-due covers the time from
beginning of the first payment period up to
the one end of the last payment period.
The present value of A-due or is the value
on the day of the first payment
Ordinary annuity of
The amount of A-due or the value at the end
of the term, is the sum of the accumulated
value of the payments at the end of the term.
Ordinary annuity of

Annuity Due - Formulas

Finding F when given A

(1 i )
F A
i

n 1

Finding P when given A

1 (1 i )
P A
i

n 1

Heart wants to buy a computer set

within a year. She decides to make
regular deposits of P3,000 at the
start of every month, her money
earning 5% compounded monthly.
How much will she have in her
savings a year after?

How much should be invested in a

fund at the beginning of each year
in order to accumulate P80,000 at
the end of 10 years if the fund is
invested at 5% converted annually?

Find the cash equivalent of an

item that was purchased for
P18,000 down payment and
P2,500 at the beginning of each
six months for 3 years, if
interest is 5 % compounded
semi-annually.

Nette bought a brand new car. What

is the cash price of the car if she has
to make 36 quarterly payments of
P22,000 at the beginning of each
quarterly
period
at
10.5%
compounded quarterly?

Tonio wants to have P95,000 for his

traveling expenses four years from
now. How much must he save at the
beginning of each quarter starting
now, if he gets 6% compounded
quarterly interest on his savings?

How much should Analyn deposit at

the beginning of every three months
if the bank pays 12% compounded
quarterly to have a total amount of
P416, 085 after three years?

The annual premium on a life

insurance policy is P88,000 payable
in advance. What would be the
monthly premium, if the interest
rate is based on 9% compounded
monthly?

In purchasing a high quality handy

camera, the buyer agreed to pay
P9,375 at the beginning of each 6
months for 8 years, with the first
payment due on the date of
purchase. If the interest rate is
19.5% converted semiannually, find
the cash price of the camera.

Seat Work:
1.) A loan of P500,000 was signed by Liza
who promised to pay it at the beginning
of each month for 5 years. If money is
worth 12% compounded monthly, what
will be the total sum paid by Liza?
2.) How much should Robert pay at the
beginning of every six months at 10%
compounded semi annually to
accumulate P298, 085 for 8 years?