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Growing Annuity Payment using Present Value Calculator

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Present Value Basics of Time Value of Money Future value

✖The Present Value of the annuity is the value that determines the value of a series of future periodic payments at a given time.ⓘ Present Value [PV]			+10% -10%
✖The Rate per Period is the interest rate charged.ⓘ Rate per Period [r]			+10% -10%
✖Growth Rate refer to the percentage change of a specific variable within a specific time period, given a certain context.ⓘ Growth Rate [g]			+10% -10%
✖The Number of Periods is the periods on an annuity using the present value, periodic payment, and periodic rate.ⓘ Number of Periods [n_Periods]			+10% -10%

✖Initial Payment refers to the first installment or upfront amount paid at the beginning of a financial transaction or contract.ⓘ Growing Annuity Payment using Present Value [PMT_initial]

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Growing Annuity Payment using Present Value Solution

STEP 0: Pre-Calculation Summary

Formula Used

Initial Payment = Present Value*((Rate per Period-Growth Rate)/(1-(((1+Growth Rate)/(1+Rate per Period))^Number of Periods)))
PMT_initial = PV*((r-g)/(1-(((1+g)/(1+r))^n_Periods)))
This formula uses 5 Variables

Variables Used

Initial Payment - Initial Payment refers to the first installment or upfront amount paid at the beginning of a financial transaction or contract.
Present Value - The Present Value of the annuity is the value that determines the value of a series of future periodic payments at a given time.
Rate per Period - The Rate per Period is the interest rate charged.
Growth Rate - Growth Rate refer to the percentage change of a specific variable within a specific time period, given a certain context.
Number of Periods - The Number of Periods is the periods on an annuity using the present value, periodic payment, and periodic rate.

STEP 1: Convert Input(s) to Base Unit

Present Value: 100 --> No Conversion Required
Rate per Period: 0.05 --> No Conversion Required
Growth Rate: 0.02 --> No Conversion Required
Number of Periods: 2 --> No Conversion Required

STEP 2: Evaluate Formula

Substituting Input Values in Formula

PMT_initial = PV*((r-g)/(1-(((1+g)/(1+r))^n_Periods))) --> 100*((0.05-0.02)/(1-(((1+0.02)/(1+0.05))^2)))

Evaluating ... ...

PMT_initial = 53.2608695652174

STEP 3: Convert Result to Output's Unit

53.2608695652174 --> No Conversion Required

FINAL ANSWER

53.2608695652174 ≈ 53.26087 <-- Initial Payment

(Calculation completed in 00.004 seconds)

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Growing Annuity Payment using Present Value Formula

LaTeX Go

Initial Payment = Present Value*((Rate per Period-Growth Rate)/(1-(((1+Growth Rate)/(1+Rate per Period))^Number of Periods)))
PMT_initial = PV*((r-g)/(1-(((1+g)/(1+r))^n_Periods)))

What is Growing Annuity Payment using Present Value?

A growing annuity payment using present value refers to a series of periodic payments that increase over time and are adjusted for inflation or growth, all while taking into account the time value of money. This concept is particularly relevant in finance and investment planning, where future cash flows are discounted to their present value. The growing annuity payment accounts for factors such as rising costs or increasing income, ensuring that the payments maintain their purchasing power or grow in line with expected earnings. By calculating the present value of these growing annuity payments, individuals and businesses can make informed decisions about long-term financial commitments, retirement planning, and investment strategies, considering the impact of inflation and changing economic conditions.

How to Calculate Growing Annuity Payment using Present Value?

Growing Annuity Payment using Present Value calculator uses Initial Payment = Present Value*((Rate per Period-Growth Rate)/(1-(((1+Growth Rate)/(1+Rate per Period))^Number of Periods))) to calculate the Initial Payment, The Growing Annuity Payment using Present Value is the increasing series of periodic payments, adjusted for inflation or growth, that equate to a specified present value considering the time value of money. Initial Payment is denoted by PMT_initial symbol.

How to calculate Growing Annuity Payment using Present Value using this online calculator? To use this online calculator for Growing Annuity Payment using Present Value, enter Present Value (PV), Rate per Period (r), Growth Rate (g) & Number of Periods (n_Periods) and hit the calculate button. Here is how the Growing Annuity Payment using Present Value calculation can be explained with given input values -> 53.26087 = 100*((0.05-0.02)/(1-(((1+0.02)/(1+0.05))^2))).

FAQ

What is Growing Annuity Payment using Present Value?

The Growing Annuity Payment using Present Value is the increasing series of periodic payments, adjusted for inflation or growth, that equate to a specified present value considering the time value of money and is represented as PMT_initial = PV*((r-g)/(1-(((1+g)/(1+r))^n_Periods))) or Initial Payment = Present Value*((Rate per Period-Growth Rate)/(1-(((1+Growth Rate)/(1+Rate per Period))^Number of Periods))). The Present Value of the annuity is the value that determines the value of a series of future periodic payments at a given time, The Rate per Period is the interest rate charged, Growth Rate refer to the percentage change of a specific variable within a specific time period, given a certain context & The Number of Periods is the periods on an annuity using the present value, periodic payment, and periodic rate.

How to calculate Growing Annuity Payment using Present Value?

The Growing Annuity Payment using Present Value is the increasing series of periodic payments, adjusted for inflation or growth, that equate to a specified present value considering the time value of money is calculated using Initial Payment = Present Value*((Rate per Period-Growth Rate)/(1-(((1+Growth Rate)/(1+Rate per Period))^Number of Periods))). To calculate Growing Annuity Payment using Present Value, you need Present Value (PV), Rate per Period (r), Growth Rate (g) & Number of Periods (n_Periods). With our tool, you need to enter the respective value for Present Value, Rate per Period, Growth Rate & Number of Periods and hit the calculate button. You can also select the units (if any) for Input(s) and the Output as well.

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