Annuities: immediate, due and perpetuities
General · Mathematics
Study notes
Q: ₹1000 yearly for 10 years at 8%. Find PV: immediate, due, and perpetuity. v = 1/1.08 ≈ 0.9259. Immediate: a_10 = (1-v¹⁰)/0.08 = (1-0.4632)/0.08 = 6.7101. PV = 1000×6.7101 = ₹6710. Due: ä_10 = 6.7101×1.08 = 7.2469: PV = ₹7247. Perpetuity: 1000/0.08 = ₹12500! (Due: payments at start, worth more!)