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M2 Formulas

The document outlines various financial formulas related to annuities, including calculations for present value, future value, and annuity payments based on different scenarios such as ordinary annuities, annuity due, deferred annuities, perpetuities, and uniform gradient series. Each formula is presented with its corresponding mathematical representation. The document serves as a reference for understanding how to compute values associated with different types of annuities.

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2 views1 page

M2 Formulas

The document outlines various financial formulas related to annuities, including calculations for present value, future value, and annuity payments based on different scenarios such as ordinary annuities, annuity due, deferred annuities, perpetuities, and uniform gradient series. Each formula is presented with its corresponding mathematical representation. The document serves as a reference for understanding how to compute values associated with different types of annuities.

Uploaded by

najmainkennethnimbin
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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ORDINARY ANNUITY

Finding Present Value when Annuity is Given (Uniform Series Present Worth Factor)
𝑃 = 𝐴(𝑃|𝐴, 𝑖%, 𝑛)
1 − (1 + 𝑖)−𝑛
𝑃 = 𝐴[ ]
𝑖
Finding Future Value when Annuity is Given (Uniform Series Compound Amount Factor)
𝑃 = 𝐴(𝐹 |𝐴, 𝑖%, 𝑛)
(1 + 𝑖)𝑛 − 1
𝐹 = 𝐴[ ]
𝑖
Finding Annuity When Present Value is Given (Capital Recovery Factor)
𝐴 = 𝑃(𝐴|𝑃, 𝑖%, 𝑛)
𝑖
𝐴 = 𝑃[ ]
1 − (1 + 𝑖)−𝑛
Finding Annuity When Future Value is Given (Sinking Fund Factor)
𝐴 = 𝐹(𝐴|𝐹, 𝑖%, 𝑛)
𝑖
𝐴 = 𝐹[ ]
(1 + 𝑖)𝑛 − 1

ANNUITY DUE
𝑃 = 𝐴(1 + 𝑃|𝐴, 𝑖%, 𝑛 − 1)
𝐹 = 𝐴[(𝐹 |𝐴, 𝑖%, 𝑛 + 1) − 1]

(1 + 𝑖)𝑛 − 1
𝑃 = 𝐴[ ]
𝑖(1 + 𝑖)𝑛−1
(1 + 𝑖)𝑛+1 − 1
𝐹 = 𝐴[ − 1]
𝑖

DEFERRED ANNUITY
𝑃 = 𝐴(𝑃|𝐴, 𝑖%, 𝑛)(𝑃 |𝐹, 𝑖%, 𝑚)
F = A((𝐹 |𝐴, 𝑖%, 𝑛)(𝐹 |𝑃, 𝑖%, 𝑚))
1 − (1 + 𝑖)−𝑛
𝑃 = 𝐴[ ]
𝑖(1 + 𝑖)𝑚
(1 + 𝑖)𝑛 − 1
𝐹 = 𝐴[ ]
𝑖(1 + 𝑖)−𝑚

PERPETUITY
𝐴
𝑃=
𝑖

UNIFORM GRADIENT SERIES


𝑃 = 𝑃𝐴 + 𝑃𝐺
𝐺 (1 + 𝑖)𝑛 − 1
𝑃𝐺 = [ − 𝑛] (1 + 𝑖)−𝑛
𝑖 𝑖
1 − (1 + 𝑖)−𝑛
𝑃𝐴 = 𝐴 [ ]
𝑖

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