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Q » How do you calculate the present value of an annuity?

John

17 Oct, 2025

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A » To calculate the present value of an annuity, use the formula PV = Pmt × [(1 - (1 + r)^-n) / r], where PV is the present value, Pmt is the periodic payment, r is the interest rate per period, and n is the total number of periods. This formula discounts future payments to their present value, reflecting the time value of money.

Michael

17 Oct, 2025

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A »The present value of an annuity is calculated using the formula: PV = Pmt × [(1 - (1 + r)^-n) / r], where Pmt is the annuity payment, r is the interest rate per period, and n is the number of periods. For example, if you receive $1,000 annually for 5 years with an interest rate of 5%, the present value is $1,000 × 4.3295 ≈ $4,329.50.

James

17 Oct, 2025

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A »The present value of an annuity is calculated using the formula: PV = PMT x [(1 - (1 + r)^(-n)) / r], where PV is the present value, PMT is the periodic payment, r is the interest rate per period, and n is the number of periods. This formula helps determine the current worth of a series of future cash flows.

David

17 Oct, 2025

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