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Unformatted text preview: t C C C C Ordinary Annuities The formula can be modified as follows: 5 + = r) (1 11 r C PVA t Text Book Version  PV 6 If manually calculating the payment, this version isolates the payment. The bracketed portion is the present value annuity factor. 1 1 (1 ) n r PV PMT r+ = Text Book Version  FV 7 (1 ) 1 n r FV PMT r + = Back To The Lottery Problem You won $100,000 in the lottery and will receive $20,000 at the end of each of the next five years. What are your winnings worth today if you assume a 9% discount rate? 8 1 2 3 4 $20,000 $20,000 $20,000 $20,000 $20,000 5 r = .09...
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 Spring '12
 VictorWakeling

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