Category: Bookkeeping 101

PVIF Calculator

Sep 18, 2020 Bookkeeping 101 by ann
Behind every table, calculator, and piece of software, are the mathematical formulas needed to compute present value amounts, interest rates, the number of periods, and the future value amounts. We will, at the outset, show you several examples of how to use the present value formula in addition to using the PV tables. If you
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Fixed Annuities

Sep 18, 2020 Bookkeeping 101 by ann
In a fixed annuity account, your monthly payment is based on a fixed interest rate applied to the account balance at the start of payments. Variable annuity account payments are based on the investment performance of your account. How do you find the present value of an annuity table? If you know an annuity is
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Present Value of $1 Annuity Table

Sep 18, 2020 Bookkeeping 101 by ann
For perpetuities, however, there are an infinite number of periods, so we need a formula to find the PV. The formula for calculating the PV is the size of each payment divided by the interest rate. The PV for both annuities -due and ordinary annuities can be calculated using the size of the payments, the
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The present value factor

Sep 17, 2020 Bookkeeping 101 by ann
Use of the Present Value Factor Formula Rate – Rate is the interest rate or discounted rate used for discounting the future cash flow. As stated before, there can be a different rate for cash flow at different time period based on inflation and risk premium, but for simplicity purpose, we will use a single
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