Definition of Annuity Formula

Definition: If annuity payments over time are (0,P,P,...P) for n periods, and the constant interest rate r>0, then the net present value to the recipient of the annuity can be calculated by the annuity formula:

NPV(A) = (1-(1+r)^-n)P/r(Econterms)

Terms related to Annuity Formula:

• Annuity

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