Description Usage Arguments Details Value Note Author(s) References See Also Examples

View source: R/4_financialFunctions.R

Function to calculate present value of annuities-certain.

1 |

`i` |
Effective interest rate expressed in decimal form. E.g. 0.03 means 3%. It can be a vector of interest rates of the same length of periods. |

`n` |
Periods for payments. If n = |

`m` |
Deferring period, whose default value is zero. |

`k` |
Yearly payments frequency. A payment of |

`type` |
The Payment type, either |

This function calculates the present value of a stream of fixed payments separated by equal interval of time. Annuity immediate has the fist payment at time t=0, while an annuity due has the first payment at time t=1.

A string, either "immediate" or "due".

The value returned by annuity function derives from direct calculation of the discounted cash flow and
not from formulas, like *{a^{≤ft( m \right)}}_{≤ft. {\overline {\,
n \,}}\! \right| } = \frac{{1 - {v^n}}}{{{i^{≤ft( m \right)}}}}*. When m is greater than
1, the payment per period is assumed to be *\frac{1}{m}*.

Giorgio A. Spedicato

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

1 2 3 4 5 6 7 8 | ```
# The present value of 5 payments of 1000 at one year interval that begins
# now when the interest rate is 2.5% is
1000*annuity(i=0.05, n=5, type = "due")
#A man borrows a loan of 20,000 to purchase a car at
# a nominal annual rate of interest of 0.06. He will pay back the loan through monthly
#installments over 5 years, with the first installment to be made one month
#after the release of the loan. What is the monthly installment he needs to pay?
R=20000/annuity(i=0.06/12, n=5*12)
``` |

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