Future Value of an Annuity
S = R [ ((1+i)n-1)/ i]
Instructions: Familiarize yourself with the following
terms. Be certain that you know the definition of each
term and where it corresponds in the Future Value of Annuity formula.
S is the future annuity value.
The accumulated value is the money at the end. It's
the money you have earned after receiving interest for so long.
R = amount of money.
R is the amount of money paid at the end of each period.
i = the rate or r/m.
i is the interest the account earns per period.
r = the rate of interest.
r is the interest the account per year.
m = conversion periods.
m is the number of conversion periods per year.
n = m*t or conversion periods.
n is the total number of times the account earns interest.
t = years.
t is the number of years the process will go on for.
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Intro FV of an Annuity
Chapter 5 Mathematics of Finance