decreasingAnnuity: Function to evaluate decreasing annuities.

In lifecontingencies: Financial and Actuarial Mathematics for Life Contingencies

Function to evaluate decreasing annuities.

Description

This function returns present values for decreasing annuities-certain.

Usage

decreasingAnnuity(i, n, type = "immediate")

Arguments

i	A numeric value representing the interest rate.
n	The number of periods.
type	The payment type. Use "immediate" (default) for an annuity-immediate, where payments are made at the end of each period, or "due" for an annuity-due, where payments are made at the beginning of each period. For compatibility, "arrears" is an alias for "immediate" and "advance" is an alias for "due" (can be abbreviated).

Details

A decreasing annuity has the following flows of payments: n, n-1, n-2, ..., 1, 0. For an annuity-immediate these payments occur at times 1,2,\ldots,n; for an annuity-due they occur at times 0,1,\ldots,n-1.

Value

A numeric value reporting the present value of the decreasing cash flows.

Warning

The function is provided as is, without any guarantee regarding the accuracy of calculation. The author disclaims any liability for eventual losses arising from direct or indirect use of this software.

Note

This function calls presentValue function internally.

Author(s)

Giorgio A. Spedicato

References

Broverman, S.A., Mathematics of Investment and Credit (Fourth Edition), 2008, ACTEX Publications.

See Also

annuity, increasingAnnuity, DAxn

Examples

# The present value of 10, 9, 8, ..., 0 payable at the end of the period for 10 years is
decreasingAnnuity(i = 0.03, n = 10)
# Assuming a 3% interest rate
sum((10:1)/(1 + .03)^(1:10))

lifecontingencies documentation built on Aug. 24, 2026, 1:07 a.m.