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Unformatted text preview: How much will you have in 10 years? Solve for FVA 5 Annuity Due Like an Ordinary Annuity, an Annuity Due meets the same tests: The payments are the same. They occur in the same frequency. There is a finite number of payments. There is no period where a payment is 6 Cash Flow Timing Before we said to assume that the first payment occurs one period from the present (or, at the end of the period). Say, an Ordinary Annuity calls for five, annual $20,000 paymentsthe PVA formula assumes the cash flows occur as follows: 7 1 2 3 4 $20,000 $20,000 $20,000 $20,000 $20,000 5 1 2 3 4 $20,000 $20,000 $20,000 $20,000 $20,000 5 Cash Flow Timing  PV The PVA formula (and the calculator) will value these cash flows as of t =0 (one period before). 8 1 2 3 4 $20,000 $20,000 $20,000 $20,000 $20,000 5 1 2 3 4 $20,000 $20,000 $20,000 $20,000 $20,000 51...
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 Spring '12
 VictorWakeling
 Annuity

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