Present Worth of Annuity

Present Worth of Annuity

FI-05
ASPCSPAdvanced

Formula
P = A × [(1+i)ⁿ − 1] ÷ [i(1+i)ⁿ]
When to Use

Calculate the present value of a series of equal periodic payments. Used to compare life-cycle costs.

Symbol Legend
SymbolMeaningUnitNote
PPresent worth of the annuity$
AEach equal periodic payment$
iInterest ratedecimal
nNumber of periods

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