Ordinary annuity

Time Value Of Money
Calculate value of an ordinary annuity

To calculate value of ordinary annuity use the next structured settlement annuity

Annuity Value In this equation , PMT represents the payment amount for each period n stands the number of periods, t represents the current time period, and I stands for the interest rate. to calculate the present value, you need to calculate each individual payments  present value, then sum the results. this answer will give you the presents value of an ordinary annuity.

ordinary annuity example suppose that ABC Company wants to know the present value of ordinary annuity in which payments of $400 have been made over a period of three years at an interest rate of five percent . to calculate the present value ,pug these values into the equation s follows .

The calculation can be long and tedious, so using your financial calculator or spreadsheet program is recommended.to use your financial calculator ,enter -400 for PMT,three for N,zero for FV,and five for I.press the pv button to receive the present value of annuity’s cash flow. Time value of money ordinary annuity