How do you calculate the present value of an annuity

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Use Financial Management: Principles and Applications� (I believe it is in the Pearson+ Multi Title Subscription, 4-Month Subscription option) on textbooks.com

Essay 2: How do you calculate the present value of an ? A perpetuity? A growing perpetuity? Which would you prefer?

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Answer preview to How do you calculate the present value of an annuity

The present value of an annuity refers to the current value of all future payments in cash which is influenced by the discount rate or therate of retum of the annuity. The present value of an annuity will be higher if therate of retum of the annuity is lower. When calculating the present value of an annuity it is important to take into consideration the time value of money as it

Last Updatd: 02 Aug,2023

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