Part III- The Time Value of Money
11.6: Future and Present Annuity Factors- Mathematical Formulas
99 of 150 · 154 words
From Introduction to Financial Analysis by LibreTexts (Kenneth S. Bigel, Touro University), used under the CC BY 4.0 licence. Written for a general audience, not for NEPSE.
Key : PVAF – Present Value Annuity Factor. FVAF – Future Value Annuity Factor.
Solution 1 : [(1) ÷ (0.10/2)] – [(1) ÷ (0.10/2) (1 + 0.10/2) 5 × 2 ] = 7.72173493
*This multiplier should be the same as in your Present Value Annuity Table.
Solution 2 : [(1) ÷ (0.095 / 2 )] – [(1) ÷ ( 0.095 / 2 ) (1 + 0.095 / 2 ) 5 × 2 ] = Fill in your answer
*This multiplier is not in your Present Value Annuity Table. Compare the two solutions.
S olution 3 : [(1 + 0.10/2) 5 x 2 – 1] ÷ 0.10/2 = 12.57789253554883
*This multiplier should be the same as in your Future Value Annuity Table.
Solution 4 : [(1 + 0.1012/2) 5 x 2 – 1] ÷ 0.1012/2 = Fill in your answer
*This multiplier is not in your Future Value Annuity Table. Compare the two solutions .
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