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19 April, 01:53

Time value of money calculations can be solved using a mathematical equation, a financial calculator, or a spreadsheet. Which of the following equations can be used to solve for the future value of an ordinary annuity?

PMT x {[ (1+r) n - 1] / r} x (1 + r)

PMT x {[ (1+r) n - 1] / r}

PMT x {1 - [1 / (1+r) n]} / r FV / (1+r) n

PMT/r

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  1. 19 April, 02:17
    0
    PMT x {[ (1+r) n - 1] / r}

    Explanation:

    Ordinary annuity is the payment or receipt of fixed amount for a specified time starting at the end of the first period of payment. The basic equation used for the calculation of future value of an ordinary annuity is PMT x {[ (1+r) n - 1] / r}. As compounding effect all the monthly payment is dealt only this Equation. Other equation are for perpetuity, present value of annuity and Future value of advance annuity.
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