BU283 Chapter Notes - Chapter 4: Cash Flow, Fixed-Rate Mortgage, Down Payment
Document Summary
Pmt = periodic payment in annuity, n = number of payments i = interest rate future value interest factor for an annuity (fvifa) Annuity: a series of equal payments made at equal intervals: don"t have to be made annually monthly, weekly. Daily etc: payments equal each other interval bw them is the same, more common always ordinary annuity unless specified. Ordinary annuity: annuity in which payments are made at end of period. Annuity due: annuity in which payments are made at beginning of each period. Future value of an ordinary annuity get fv at the end of period 2, not r to get the fv at end of period 3, need to move balance forward one period. Present value of an ordinary annuity: pmt = periodic pmt in annuity. I= interest rate: n = number of pmts. Present value interest factor for an annuity (pvifa) Imbedded annuities imbedded annuity: when an annuity is missed w other irregular payments.
