Home
Complete Listing
RSS Feed
Contact
Search

Newest Posts
Jg Wentworth
Long Term Care Annuity
Lew Nason
Erisa Long Term Attorney
Hurricane Adjuster
Disability Policy
Checking Account Overdraft Protection
Commercial General Liability Insurance Quote

Other Blogs
Insurance Trouble
Drink Aficionado
Worldwide Snacks
House Divine
Blood Sucking
Food Wick
Lets Food!
Meal Foods
Wedding Crash
Gift Tab
Card Boat
Gift Clicks

Marketplace

Pv Annuity Formula

Posted on January 20, 2010.
Pv Annuity FormulaHow do I solve for the rate of return in a future value of annuity formula?

In the future value of an annuity formula:

PV * [(1 + r) fv ^ n - 1] / r =

how do I solve for r? Thank you.

Formula:
= SUM ([1 + r] ^ n)

Answer: SUM ([1 + r] ^ n)

Applying the formula above, assume $ 1,000 deposit per year for 3 years at 10% compounded annually:
$ 1,000 = (1.1 + [1.1 * 1.1] + [1.1 * 1.1 * 1.1])
$ 1,000 = (1.1 + 1.21 + 1.331)
= $ 1.000 (3.641)
= $ 3,641

Proof (sales per year, with a 10% interest):
1st year
+ 0.1 = $ 1,000 ($ 1,000)
= $ 1,000 + $ 100
= $ 1,100

2nd year
= $ 1,100 + $ 1,000 + 0.1 ($ 1,100 + $ 1,000)
+ 0.1 = $ 2,100 ($ 2,100)
= $ 2.100 + $ 210
= $ 2,310

3rd year
= $ 2,310 + $ 1,000 + 0.1 ($ 2,310 + $ 1,000)
+ 0.1 = $ 3,310 ($ 3,310)
= $ 3,310 + $ 331
= $ 3,641

complete the appropriate number of P, N, F, V and solve an equation as normal.

Share |

Comments

There are no comments.

Leave a Comment

Your Name
Your Email
Comments
Human Check. Type 4671.