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Chapter 5 Section 3 and 4 The rst two formulas you will use when you want to nd the present value of an annuity. 1 A=R A=R 1 (1+ nr ) r n (1+ nr ) r n nt End of payment period nt+1 + 1 Begining of payment period The second two formulas you will use when you want to nd the future value of an annuity. (1+ r )nt 1 A = R nnr (1+ r )nt+1 A = R n nr 1 End of payment period 1 Begining of payment period Now in section 5.4 the only formula that you will need is the very rst present value formula where payments are at the end. Now for the loans in section 5.4 your periodic payments are doing two things. They are rst paying o all the interest that you owe on the previous balance and then they are repaying part of the amount of the loan. So you might be asked to nd the following: Total interest paid=nance charge=ntR A Interest in rst payment=A nr Principal repaid in the rst payment=R Interest in rst payment