Homework 3 Hint - on financial calculators Where i ≠ g'r...

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Homework 3 Hint Present value of a growing annuity In this case each cash flow grows by a factor of (1+g). Similar to the formula for an annuity, the present value of a growing annuity (PVGA) uses the same variables with the addition of g as the rate of growth of the annuity (A is the annuity payment in the first period). This is a calculation that is rarely provided for
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Unformatted text preview: on financial calculators. Where i ≠ g ('r' can replace 'i'): To get the PV of a growing annuity due , multiply the above equation by (1 + i ). Where i = g :...
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