1st Sem 2020 ANNUITY

Annuity Due - it is one where payments are made at the start of each period, beginning from the first
period.

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Formula: 1
a) Present worth

A [ ( 1 + i )n - 1 - 1 ]
P = -------------------------------- + A
( 1 + i )n - 1 i

b) Future worth

A [ ( 1 + i )n + 1 - 1 ]
F = -------------------------------- - A
i

College of Engineering, Architecture & Technology

1st Sem 2020 ANNUITY

Perpetuity - it is one where payment periods extend forever or in which the periodic payments continue
indefinitely.

Page |
Formula: 2
A
P = ------
i

College of Engineering, Architecture & Technology