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What is Present Value of Annuities Explained about?

1) The present value of an annuity can be calculated as the sum of the present values of each annual payment over the term of the annuity. This can be simplified into a single formula that divides the annual payment by the interest rate adjusted for the number of years. 2) For a 3-year annuity paying $100 annually with a 6% interest rate, the present value is $267.30. 3) As the term of the annuity approaches infinity, becoming a perpetuity, the present value formula simplifies further to the annual paym

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drakowam

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