Does Anyone Know What This Is?
- Thread starter ken5000
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- Apr 12, 2005
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Sure. Where did you find it?
That is a 30 year annuity immediate of one dollar per year paying and crediting annually at 3%
Solution is on this wise:
i = 3% = 0.03
v = 1/(1+i)
Your expression, then, is v + v^2 + ... + v^30 = (v - v^31)/(1-v) = (1 - v^30)/(i)
If you can create the summation and add it up, you should be able to solve any such problem.
That is a 30 year annuity immediate of one dollar per year paying and crediting annually at 3%
Solution is on this wise:
i = 3% = 0.03
v = 1/(1+i)
Your expression, then, is v + v^2 + ... + v^30 = (v - v^31)/(1-v) = (1 - v^30)/(i)
If you can create the summation and add it up, you should be able to solve any such problem.
By the way, this symbol uses what is sometimes called actuarial notation. Actuaries are professionals who work with the financial aspects of retirement and insurance. They use all kind of weird subscripts and superscripts like this. As an actuary, I agree with the formula of tkhunny. Are you studying finance? Many financial calculators have the simpler formulas like this built in. (The use of "a" above stands for annuity.)