annuity_symbol_hw

annuity_symbol_hw - ACF329 Annuity Symbols What you need to...

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ACF329 Annuity Symbols; What you need to know for Midterm 1 1. An “annuity” is a sequence of equally spaced payments. The length of time between two con- secutive payments is called the “interest period.” In the examples below, time is measured in units of interest periods. So “time 2” is two interest period after “time 0.” For example, if the interest period is 1 month, then time 3 is three months after time 0. If the interest period is 6 months, then time 3 is eighteen months after time 0. For Midterm 1, you need to know what the annuity symbols, a n i , s n i , ¨ a n i , ¨ s n i , a i , ¨ a i represent. These are described in Sections 3.2–4. Unless otherwise specified, assume compound interest. Drawing time lines with the payments written in may be helpful to un- derstand these concepts. (a) Example: a 10 2% is the total value at time 0 of ten $1 payments. The payments are made at times 1, 2, 3, . .. , 10. The interest rate per interest period is 2%. Therefore,
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annuity_symbol_hw - ACF329 Annuity Symbols What you need to...

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