B11 Annuity Immediate Present Value

Question 1

What is the equation to sum a series series?

Answer 1

S = (a-ar^n)/(1-r)

The sum of geometric series equals the first term minus the what comes after the term you’re given in the series, divided by 1 minus what we multiply by each time.

Question 2

what is an annuity

Answer 2

a series of payments made at equal time intervals
Ex. rent, mortgage, car payments, paychecks, pension benefits

Question 3

what is annuity immediate

Answer 3

annuity with payments at the end of each time interval

Question 4

what is k * (a angle n at a rate of i) mean?

Answer 4

k is the amount of each payment
k * (a angle n) represents the value of n payments of k, one period before the frist payment
i is the rate of interest

Its how you find the present value of n payments one period before the first payment

Question 5

what is the formula for the present value of annuity immediate a angle n at a rate of i with n payments of 1, discounted using an effective periodic iinterest rate of i

Answer 5

a angle n at a rate of i = (1-v^n)/i