Annuities (HSC SSCE Mathematics Standard): Flashcards

📚Flashcards
Using a Future Value Table
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What is a future value table?

Tool with pre-calculated values for annuity calculations

What do rows represent in a future value table?

Number of time periods

What do columns represent in a future value table?

Interest rate per period

What are intersection values in future value tables?

Multiplication factors for calculations

Why is period 1 value always 1.0000?

No interest earned yet on a single contribution

Formula for number of periods with compounding

n=years×frequency per yearn = \text{years} \times \text{frequency per year}

Formula for interest rate per period

r=annual ratecompounding frequencyr = \frac{\text{annual rate}}{\text{compounding frequency}}

Formula to calculate future value (FV)

FV=intersection value×contributionFV = \text{intersection value} \times \text{contribution}

Formula to find payment amount (PMT)

PMT=FVintersection value\text{PMT} = \frac{FV}{\text{intersection value}}

What does intersection value include?

Total contributions AND compound interest earned

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