FVA Continuous Compounding = Cash Flow * [(ert -1)/ (er -1)]
FVA = Future Value of Annuity
r = rate per period
t = time in months
OR
FVAD = C *[{(1+r)t -1}/r] * (1+r)
FVAD = Future Value of Annuities Due
C = Cash flows
r = rate per period
t = time equivalent to the number of payment periods
Applying this to your question,
Cash Flow = 200r=12200 * [((1.12)(8) -1)/0.12]*(1+0.12) = $2755.13
The future value of annuities due is a slight modification of the future value of ordinary annuities because of the nature of cash flows. For the future value of annuities due, 1 is added to the rate and multiplied by the future value of ordinary annuities equation to compensate for the cash flow timings. Thus, the future value of ordinary annuities does not include the last part of the FVAD equation (* 1+r).
https://www.financeformulas.net/Future-Value-of-Annuity-Continuous-Compounding.html
https://www.investopedia.com/retirement/calculating-present-and-future-value-of-annuities/
Tuesday, August 9, 2016
How much will Sam make after 8 years if she earns 12% compound annuity and invests $200 at the beginning of every year?
Subscribe to:
Post Comments (Atom)
Why is the fact that the Americans are helping the Russians important?
In the late author Tom Clancy’s first novel, The Hunt for Red October, the assistance rendered to the Russians by the United States is impor...
-
The poem contrasts the nighttime, imaginative world of a child with his daytime, prosaic world. In the first stanza, the child, on going to ...
-
There are a plethora of rules that Jonas and the other citizens must follow. Again, page numbers will vary given the edition of the book tha...
-
Robinson Crusoe, written by Daniel Defoe, is a novel. A novel is a genre defined as a long imaginative work of literature written in prose. ...
-
Hello! This expression is already a sum of two numbers, sin(32) and sin(54). Probably you want or express it as a product, or as an expressi...
-
The title of the book refers to its main character, Mersault. Only a very naive reader could consider that the stranger or the foreigner (an...
-
"The Wife's Story" by Ursula Le Guin presents a compelling tale that is not what it initially seems. The reader begins the sto...
-
In Celie's tenth letter to God, she describes seeing her daughter in a store with a woman. She had not seen her daughter since the night...
No comments:
Post a Comment