Generating Future and Present Values of Annuity Using Interest Rate Theory

Clement Adeyeye Awogbemi; Alagbe Samson Adekola; Ajao Isaac Oluwaseyi

Generating Future and Present Values of Annuity Using Interest Rate Theory

المؤلفون

Clement Adeyeye Awogbemi Statistics Programme, National Mathematical Centre, Abuja, Nigeria https://orcid.org/0000-0002-0942-7954
Alagbe Samson Adekola Mathematics Department, Morgan State University, Baltimore, Maryland, USA
Ajao Isaac Oluwaseyi Statistics Department, Federal Polytechnic, Ado-Ekiti, Nigeria

الكلمات المفتاحية:

Annuity future value، Annuity present value، Continuous compounding، Compounding periods، Periodic payments

الملخص

In this study, the future and present values of annuity were generated on the basis of interest rate theory. This was anchored on the fact that every compound interest problem involves the annual rate and the rate per compounding period. It was also shown that as the frequency of compounding periods increases, the compound amount behaviour (1+r/n)ⁿ tends to exponential growth rate (e^r). It was deduced that effective rate of interest is a function of nominal rates and compounding periods.

التنزيلات

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منشور

2023-06-30

كيفية الاقتباس

Awogbemi, C. A., Adekola, A. S., & Oluwaseyi, A. I. (2023). Generating Future and Present Values of Annuity Using Interest Rate Theory. KEPES, 21(2), 269–276. استرجع في من https://scholopress.com/kepes-journal/article/view/81