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Definition of Annuity Formula

From Econterms, for About.com

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)

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