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8. Present value of Annuity Due example ( Enter your problem )
  1. Find Present value (PV) Example
  2. Find Regular Deposit (C) Example
  3. Find Interest Rate (i) Example
  4. Find Time (n) Example

2. Find Regular Deposit (C) Example





1. Find Regular Deposit
(PMT Amount) C = ?
Interest Rate i = 10%, Time n = 5 Year, Present value PV = 4169.87,
Deposit Frequency = at the beginning (Annuity Due) of every Year (1/year)
for Present value of Annuity Due method


Solution:
`i=10%=0.1` per year (Interest rate)

`n=5` years (Number of periods)

`PV=4169.87` (Present value)

Now, Present value (Annuity Due) formula is
`PV_("Annuity Due")=C*[(1-(1+i)^(-n))/(i)]*(1+i)`

`:.4169.87=C*[(1-(1+0.1)^-5)/(0.1)]*(1+0.1)`

`:.4169.87=C*[(1-(1.1)^-5)/(0.1)]*1.1`

`:.4169.87=C*[(1-0.6209)/(0.1)]*1.1`

`:.4169.87=C*[3.79]*1.1`

`:.C=4169.87/(3.79*1.1)`

`:.C=1000`
2. Find Regular Deposit
(PMT Amount) C = ?
Interest Rate i = 10%, Time n = 3 Year, Present value PV = 13677.69,
Deposit Frequency = at the beginning (Annuity Due) of every Year (1/year)
for Present value of Annuity Due method


Solution:
`i=10%=0.1` per year (Interest rate)

`n=3` years (Number of periods)

`PV=13677.69` (Present value)

Now, Present value (Annuity Due) formula is
`PV_("Annuity Due")=C*[(1-(1+i)^(-n))/(i)]*(1+i)`

`:.13677.69=C*[(1-(1+0.1)^-3)/(0.1)]*(1+0.1)`

`:.13677.69=C*[(1-(1.1)^-3)/(0.1)]*1.1`

`:.13677.69=C*[(1-0.7513)/(0.1)]*1.1`

`:.13677.69=C*[2.49]*1.1`

`:.C=13677.69/(2.49*1.1)`

`:.C=5000`




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