FormulaDen.com

Physics Chemistry Math Chemical Engineering Civil Electrical Electronics Electronics and Instrumentation Materials Science Mechanical Production Engineering Financial Health

Present Worth of Annuity Formula

Fx Copy

LaTeX Copy

The Present Worth of an Annuity is a financial metric that represents the current value of a series of equal cash flows or payments received or paid at regular intervals over time. Check FAQs

P = A \cdot (\frac{{(1 + i)}^{n} - 1}{i \cdot {(1 + i)}^{n}})

P - Present Worth of an Annuity?A - Annuity?i - Discrete Compound Interest Rate?n - Number of Interest Periods?

Present Worth of Annuity Example

With values

With units

Only example

Here is how the Present Worth of Annuity equation looks like with Values.

Here is how the Present Worth of Annuity equation looks like with Units.

Here is how the Present Worth of Annuity equation looks like.

1859.4104 = 1000 \cdot (\frac{{(1 + 0.05)}^{2} - 1}{0.05 \cdot {(1 + 0.05)}^{2}})

1859.4104 = 1000 \cdot (\frac{{(1 + 0.05)}^{2} - 1}{0.05 \cdot {(1 + 0.05)}^{2}})

1859.4104 = 1000 \cdot (\frac{{(1 + 0.05)}^{2} - 1}{0.05 \cdot {(1 + 0.05)}^{2}})

Tip: Use pencil ( Pencil

) icon above to edit Input Values and Units.

Calculate

Recalculate

Solution

Copy

Reset

You are here -

Home » Category

Engineering » Category

Chemical Engineering » Category

Plant Design and Economics » fx Present Worth of Annuity

Present Worth of Annuity Solution

Follow our step by step solution on how to calculate Present Worth of Annuity?

FIRST Step Consider the formula

P = A \cdot (\frac{{(1 + i)}^{n} - 1}{i \cdot {(1 + i)}^{n}})

Next Step Substitute values of Variables

∴

P = 1000 \cdot (\frac{{(1 + 0.05)}^{2} - 1}{0.05 \cdot {(1 + 0.05)}^{2}})

Next Step Prepare to Evaluate

∴

P = 1000 \cdot (\frac{{(1 + 0.05)}^{2} - 1}{0.05 \cdot {(1 + 0.05)}^{2}})

Next Step Evaluate

∴

P = 1859.410430839

LAST Step Rounding Answer

∴

P = 1859.4104

Present Worth of Annuity Formula Elements

Variables

Present Worth of an Annuity

The Present Worth of an Annuity is a financial metric that represents the current value of a series of equal cash flows or payments received or paid at regular intervals over time.

Symbol: P

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Present Worth of an Annuity

Annuity

Annuity is a financial product or arrangement that involves a series of periodic payments or receipts made at equal intervals.

Symbol: A

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Annuity

Discrete Compound Interest Rate

Discrete Compound Interest Rate rate refers to the interest that is calculated and compounded at specific, discrete intervals during a given period, rather than continuously.

Symbol: i

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Discrete Compound Interest Rate

Number of Interest Periods

The number of interest periods, often denoted as n, represents the total count of compounding periods within a specified time frame for an investment or loan.

Symbol: n

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Number of Interest Periods

Other formulas in Interest and Investment Costs category

Go Capitalized Cost

K = V + (\frac{C R}{{(1 + i)}^{n} - 1})

Go Future Worth of Annuity

F = A \cdot (\frac{{(1 + i)}^{n} - 1}{i})

Go Future Worth of Annuity given Present Annuity

F = P \cdot ({(1 + i)}^{n})

Go Future Worth of Perpetuity

F P = A \cdot (\frac{{(1 + i)}^{n} - 1}{(i)})

How to Evaluate Present Worth of Annuity?

Present Worth of Annuity evaluator uses Present Worth of an Annuity = Annuity*(((1+Discrete Compound Interest Rate)^(Number of Interest Periods)-1)/(Discrete Compound Interest Rate*(1+Discrete Compound Interest Rate)^(Number of Interest Periods))) to evaluate the Present Worth of an Annuity, The Present Worth of Annuity, often denoted as is a financial metric that represents the current value of a series of equal cash flows or payments received or paid at regular intervals over time. Present Worth of an Annuity is denoted by P symbol.

How to evaluate Present Worth of Annuity using this online evaluator? To use this online evaluator for Present Worth of Annuity, enter Annuity (A), Discrete Compound Interest Rate (i) & Number of Interest Periods (n) and hit the calculate button.

FAQs on Present Worth of Annuity

What is the formula to find Present Worth of Annuity?

The formula of Present Worth of Annuity is expressed as Present Worth of an Annuity = Annuity*(((1+Discrete Compound Interest Rate)^(Number of Interest Periods)-1)/(Discrete Compound Interest Rate*(1+Discrete Compound Interest Rate)^(Number of Interest Periods))). Here is an example- 2723.248 = 1000*(((1+0.05)^(2)-1)/(0.05*(1+0.05)^(2))).

How to calculate Present Worth of Annuity?

With Annuity (A), Discrete Compound Interest Rate (i) & Number of Interest Periods (n) we can find Present Worth of Annuity using the formula - Present Worth of an Annuity = Annuity*(((1+Discrete Compound Interest Rate)^(Number of Interest Periods)-1)/(Discrete Compound Interest Rate*(1+Discrete Compound Interest Rate)^(Number of Interest Periods))).

Let Others Know

✖

Facebook

Twitter

Copied!

: Value
: Unit

Present Worth of Annuity Formula

Present Worth of Annuity Example

Present Worth of Annuity Solution

Present Worth of Annuity Formula Elements

Other formulas in Interest and Investment Costs category

How to Evaluate Present Worth of Annuity?

FAQs on Present Worth of Annuity

Variable Name