Category:Definitions/Annuity Present Values

This category contains definitions related to Annuity Present Values.
Related results can be found in Category:Annuity Present Values.

Let a principal $P$ be invested every conversion period, and accumulated under compound interest with an interest rate $r$ over a number of conversion periods $n$.

The present value of $P$ is defined as:

$\dfrac {1 - \paren {1 + r}^{-n} } r$

That is, it is the amount necessary to provide $1$ unit payment at the end of $n$ conversion periods.