Concept explainers
The annual cash flows for year 1 is $500; year 2 is $400; and year 3 is $300. The
Future value of an annuity due is the total future value of a series of periodic payments made at the beginning of each year at a given interest rate for a specified period.
Here,
The future value is “FV”.
The annual payment on investment is “PMT”.
The interest rate is “r”.
The maturity period is “n”.
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