Tuesday, November 24, 2009

How to Calculate the Value of Annuity ?

There are many types of annuities which will decide how to calculate the value of annuity but if we have to use formula , then there are two formulae which are most used for calculating value of annuity .

First formula

If you have to buy any car , tv , or any other product , then this formula can used for calculating value of annuity . In many questions , you will see that buyer will pay some amount when he buys product , so deduct it from principle amount . If number of installement is more then you can use logarithm( learn here and here ) for solving these type of questions

Second formula

If  you have created any fund to buy new fixed asset then second formula is more simple than first

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