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The main topic in the listing higher than is Worth, which refers to present benefit and future value difficulties. You might have viewed the next two equations previously, The straightforward derivations of which may be found in any great finance text:

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The dilemma we wish to consider now's: How would we determine the existing value of an annuity? Detect that the 2nd equation has no P in it, so we simply cannot just clear up for P as we did in the initial equation. In a sense, We'll look at equally equations collectively by contemplating the following situation.

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