The formula to calculate the present value of an ordinary annuity is:
$$P V o = C \times \left[ \frac { 1 - \frac { 1 } { ( 1 + i ) ^ { n } } } { i } \right]$$

Question

The formula to calculate the present value of an ordinary annuity is:
 $$P V o = C \times \left[ \frac { 1 - \frac { 1 } { ( 1 + i ) ^ { n } } } { i } \right]$$

Quizplus · Accepted Answer

This formula correctly represents the calculation for the present value of an ordinary annuity, where $PV_o$ is the present value of the ordinary annuity, $C$ is the amount of each annuity payment, $i$ is the interest rate per period, and $n$ is the total number of payments.

The Formula to Calculate the Present Value of an Ordinary PVo=C×[1−1(1+i)ni]P V o = C \times \left[ \frac { 1 - \frac { 1 } { ( 1 + i ) ^ { n } } } { i } \right]PVo=C×[i1−(1+i)n1​​]

The Formula to Calculate the Present Value of an Ordinary $P V o = C \times \left[ \frac { 1 - \frac { 1 } { ( 1 + i ) ^ { n } } } { i } \right]$