calculating pv of annuity
Posted December 6, 2010
By admin
question about FV/PV of an annuity?
if you want to calculate the future value and present value of an annuity, say a purchase with a downpayment and financed by instalments monthy for a number of years, do you have to include the downpayment as part of the equation.
For example you pay 1000 upfront, and make installments of 100 a month for 5 years with an EAR of X (say 10%), when calculating the future and present values, do you have to take in to account the 1000 dollar downpayment paid at period 0 or do you only include the monthy instalments over the 5 year range that start from period one?
you include the downpayment!!! ,
Excel Finance Class 32: Calculate Present Value of Annuity (PV Function)
