Wish I'd find you during my academic period..I've studied in 2 of the top rated universities in our country..but i still wish our lecturers were at least half as effective and engaging as you are..I am currently working as a Financial Analyst and I've got this job because of this channel..and I am trying to switch..and have an exam this sunday..and here I am..once again just amazed by how easy you make things look..how you engage..I'm not sure of anybody else..but I find your lectures so effective..Just commenting to show my gratitude..Thank you once again..and wish me luck ❤
hello! came across this just as i was struggling with understanding this concept and it was really helpful thank you :) However, can I ask why we multiply PVOA by (1+r) to get PVAD? I understand that the PV would be higher if you start paying a year earlier, but is there a particular reason why it's (1+r)? Appreciate your help, thank you so much!
wouldn't it be easier if in the formula only we use 2 years to calculate pv of annuity due and add initial payment (because one payment as you said is being made at present only ) This would make formula seem more logical and easy understanding
I had a professor build a formula sheet but he did not put the negative before the n. I have spent 4 hours trying to figure out what i was doing wrong.
Hi i was watching this video and got a question from my tutorial which i think should use the annuity due equation... "You are saving for retirement. To live comfortably, you decide you will need to save $2 million by the time you are 65. Today is your 22nd birthday, and you decide, starting today and continuing on every birthday up to and including your 65th birthday, that you will put the same amount into a savings account. If the interest rate is 5%, how much must you set aside each year to make sure that you will have $2 million in the account on your 65th birthday?" but the answer is using the ordinary annuity equation... not so sure why is it the case,,, can anyone help on this?
@@maureennwigwe6173 Hi maureen, was wondering if you could let me know if what i'm doing is correct Firstly we know there's going to be 65-22 years in between so 43 years or 43 periods of payment since you're paying once a year So the 2 million is a future value, so you want to use the FV annuity R[ (1+0.05)^43 - 1] all over 0.05 multiplied by (1.05) again since its annuity due (since it's starting immediately. Because you can only compare values in the same time period Then you set the that annuity formula to 2 million and solve for R Could you let me know if it's correct?
