Deferred annuity It begins its cash flow stream subsequent to the first period A 2-stage discounting method is applied. Ist,the periodic payments are discounted back to the first period prior to the beginning of the cash flow stream. 2nd,then thelst step value is discounted to time 0 >5-11 SDUT Chen Gang Spring 2018
Deferred annuity It begins its cash flow stream subsequent to the first period A 2-stage discounting method is applied. 1 st, the periodic payments are discounted back to the first period prior to the beginning of the cash flow stream. 2 nd, then the1st step value is discounted to time 0 5-11 SDUT Chen Gang Spring 2018
Annuity:Perpetuity Perpetuity continues necessarily into eternity There cannot be a solution to its future value However,computing the PV of it is the simplest of all like PV=P i Please also note that,P is now capitalized to its initial investment principal,the PV of the perpetuity,with the i, the discounting rate as denominator. >5-12 SDUT Chen Gang Spring 2018
Annuity: Perpetuity Perpetuity continues necessarily into eternity There cannot be a solution to its future value However, computing the PV of it is the simplest of all like Please also note that, P is now capitalized to its initial investment principal, the PV of the perpetuity, with the i, the discounting rate as denominator. PV P i = 5-12 SDUT Chen Gang Spring 2018