Generating Future and Present Values of Annuity Using Interest Rate Theory

Clement Adeyeye Awogbemi; Alagbe Samson Adekola; Ajao Isaac Oluwaseyi

著者

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

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Annuity future value##common.commaListSeparator## Annuity present value##common.commaListSeparator## Continuous compounding##common.commaListSeparator## Compounding periods##common.commaListSeparator## Periodic payments

要旨

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.