### Calculate the Annuity Value, Knowing the Future Value.

The local credit union pays 6% interest, compounded monthly. How much would Jim have to deposit each month?

**SOLUTION**In this example,

Jim would have to deposit $81.10 each month.

If we use the sinking fund formula (Equation 4-6) and substitute for F the single payment compound amount formula (Equation 3-3), we obtain

We now have an equation for determining the value of a series of end - of - period payments- or disbursements -A when the present sum P is known.

The portion inside the brackets

is called the uniform.series capital recovery factor and has the notation (Aj P, i, n).

## 0 comments:

## Post a Comment