Annuity as a Recurrence Relation (HSC SSCE Mathematics Standard): Flashcards

Regular, repeated contributions of money over time

Total worth of investment at specified end date

Total contributions + compound interest earned

Uses each previous result to generate next value

$V_{n+1} = V_n(1 + r) + D$

$V_{n+1} = V_n(1 + r) - D$

Payment per period

Interest rate per period (decimal)

Divide by 12

Investment uses +D, loan uses -D