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Unformatted text preview: + += T r g g r PV 1 1 1 1 $ Annuity Due FV of annuity due: (FV of ORDINARY ANNUITY)*(1+r) Continuous Compounding Future value of $1 received today after T periods: 718 . 2 , 1 $ = e where rT e Compounding Future Value after T years of $1 with compounding at an annual interest rate r for m times per year: mT m r + 1 1 $ Effective Annual Interest rate (EAIR) The effective annual interest rate when r i s the stated interest rate and m is the compounding period: 1 ) 1 (+ m m r...
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This note was uploaded on 01/15/2010 for the course FIN 357 taught by Professor Hadaway during the Fall '06 term at University of Texas at Austin.
 Fall '06
 Hadaway
 Corporate Finance, Future Value, Perpetuity

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