Present Value of an Annuity with Infrequent Payments (Timeline & Formula Approach) скачать в хорошем качестве

Present Value of an Annuity with Infrequent Payments (Timeline & Formula Approach)

In this tutorial, we work through Example 5.28, calculating the present value of an annuity with infrequent payments. The annuity pays $450 every two years over a 20-year period, with an annual interest rate of 6%. The video demonstrates two approaches: Timeline Method – Discounting each individual cash flow using the present value of a single amount. Annuity Formula Method – Converting the annual interest rate into its two-year equivalent rate and applying the present value of an annuity formula. This example highlights how compounding affects interest rates when payments occur less frequently than once per year, and why rate conversion is critical for accurate valuation. This step-by-step walkthrough is ideal for students studying finance, accounting, business math, or time value of money concepts. Disclaimer: This video is for educational purposes only and does not constitute financial, investment, or professional advice.