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  • IMG - 0118 Engg Economy MRC 5

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    Bugoy2023
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    This document discusses annuity formulas. It defines present worth factor (P/A, i%, n) and capital recovery factor (A/P, i%, n). It shows that the future value (F) can be expressed in terms of the capital recovery factor (A), interest rate (i), and number of periods (n). Specifically, F = A(F/A, i%, n). It also notes that the capital recovery factor (A) can be expressed in terms of the future value (F) as A = F(A/F, i%, n). Finally, it discusses the difference between an ordinary annuity and an annuity due.

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    IMG_0118 Engg Economy MRC 5

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    This document discusses annuity formulas. It defines present worth factor (P/A, i%, n) and capital recovery factor (A/P, i%, n). It shows that the future value (F) can be expressed in terms of the capital recovery factor (A), interest rate (i), and number of periods (n). Specifically, F = A(F/A, i%, n). It also notes that the capital recovery factor (A) can be expressed in terms of the future value (F) as A = F(A/F, i%, n). Finally, it discusses the difference between an ordinary annuity and an annuity due.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pdf or txt
    8 views1 page

    IMG - 0118 Engg Economy MRC 5

    Uploaded by

    Bugoy2023
    This document discusses annuity formulas. It defines present worth factor (P/A, i%, n) and capital recovery factor (A/P, i%, n). It shows that the future value (F) can be expressed in terms of the capital recovery factor (A), interest rate (i), and number of periods (n). Specifically, F = A(F/A, i%, n). It also notes that the capital recovery factor (A) can be expressed in terms of the future value (F) as A = F(A/F, i%, n). Finally, it discusses the difference between an ordinary annuity and an annuity due.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    of 1

    5

    P=
    MULTIVBCTOR RTVIEW AND TRAINING CENTER

    A(PlA, i%, n)
    ffi
    where: (PIA, i%, n) = uniform series present
    worth factor
    also

    A = P[
    ;1Trf' ] = PlAtP, i%, n)
    where: (A/p, i%, n) = capital recovery
    factor

    To dnd F in tenns of A, l, and n

    From F=P(l +i),, '

    F=AI t:I$,L';(l+i),,
    t
    p,=41(l 1i)"* t ,
    or
    F = A (F/A, i%, n)
    also
    A=F[apf-r r
    or
    A = F (A/F, i%, n)

    where;

    .Yft""T;il=w
    Note:

    . (A/F, io6, n) + i= (Atp, i%, n) 4


    also, \

    Annuity Due:: is one where the payments are made at


    the beginning of each period.
    F

    AA AA
    Annuirydue,nperiods
    (n + l) periods

    P=Alr+ !_(I,..j)l_t where: n = no. ofequal payments


    I

    f =41(l+fl1"'*t-,,
    I

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