Economics Time Value Of Money Questions Medium
The formula for calculating the present value of an annuity is:
PV = PMT * [(1 - (1 + r)^(-n)) / r]
Where:
PV = Present Value of the annuity
PMT = Periodic payment or cash flow
r = Interest rate per period
n = Number of periods
This formula takes into account the periodic payment or cash flow, the interest rate per period, and the number of periods to calculate the present value of the annuity.