BUS1 170 Lecture Notes - Lecture 6: Preferred Stock, 18 Months, Cash Flow
4 Apr 2016
School
Department
Course
Professor
Document Summary
Annuity- series of equal dollar payments that are made at the end of equidistant points in time, such as monthly, quarterly, or annually. Ordinary annuity- payments are made at the end of each period. Stores promotions: 0% for 18 months or 5% for 5 years. Fv = fv of annuity at the end of the nth period. Pmt = annuity payment deposited or received at the end of each period. N = number of periods for which annuity will last. Solving for the interest rate in an ordinary annuity. You can also solve for interest rate you must earn on your investment that will allow your savings to grow to a certain amount of money by a future date. Solving for the number of periods in an ordinary annuity. You may want to calculate the number of periods it will take for an annuity to reach a certain future value, given interest rate.
