Present Value of an Annuity

This video explains how to calculate the present value of an annuity. A formula is presented for calculating the present value of an annuity and an example is used to illustrate the calculations.
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[@yangyu4489]

wow this is just so elegantly and clearly explained haha. love your teaching style

[@yaucora3810]

seriously, without this channel, I doubt if I can graduate from college.

[@BGxLoki]

Did you graduate?

[@yaucora3810]

I did

[@BGxLoki]

@@yaucora3810 let's goo. Congrats, I just started watching his videos. I'm about to test rn in an accounting class. Looking to graduate soon too

[@lemondrop8203]

@@yaucora3810 Im so proud of you

[@Cheesecake99YearsAgo]

​@@yaucora3810 nice

[@latifabinhaider9510]

you helped me for my midterm our professor explains it in a very complicated way. thank you so so much

[@Edspira]

Glad to help. Good luck on your class!

[@bseenonn1922]

Thank you!!!! My book only showed me how to do it the long way and I was getting so frustrated! Super helpful!

[@Edspira]

Glad you found it helpful!

[@annieruth7]

I appreciated the explanation of what the formula actually means. (first 3 minutes.) Thank you!

[@adlin61]

Was searching for this formula, thank you so much!

[@Edspira]

Glad it was helpful!

[@dcr6001]

thanks, saved my exam !

[@bhagatsingh5019]

Thank you for your all beautifully explained videos.

[@akhliyoribragimov9185]

How did you get 4.21236?

[@kaydeeamundson3534]

Great explanation thank you so much!

[@austin3201]

How do you came up with the answer 4.21236

[@jerichopascua1]

how did you wnd up with 4.21236?

[@dilshadmotivates]

I love your short videos

[@Edspira]

😀

[@omarzeyad1382]

just want to say thank you so much!

[@andyzzz5398]

I can't see what is the different between
Present Value;
Present Value Annuity;
Future Value;
Future Value Annuity;
excuse me, do you mind for ask me with the details and give me advice, thanks

[@asharockz7]

I'm replying late but anyway.. Present value means finding out present value of say $100 which we receive *after* say 2 years time.
Present value of annuity means finding out present value of $100 that we receive *every year for next 2 years*

[@kemerios1]

What if there is no deposit at 2 and 4? how do you calculate that?

[@emanuelkubatayev7901]

what is the purpose of this formula? I understood PV of single cash flow, but what is PV mean in this formula?

[@emanuelkubatayev7901]

Cash Depreciation? Does it mean things like inflation?

[@natalieshinobi3454]

what is the first payment starting 2 years from now?

[@Lululavish]

Didn't explain how we get the 100

[@ronaldc1582]

What if the cash flow every year is not $100?

[@waynerisner4974]

Thank you

[@Edspira]

+Wayne Risner No problem!

[@osamaalam7685]

playback speed should be 1.5 !!

[@faisalabughazaleh9715]

Thank you :) good job!

[@peterd5843]

cyash

[@asrevta]

I have my exam in 2 hours.

[@Edspira]

I hope you did well!

[@asrevta]

@@Edspira yes... thankyou

[@sdiptanil]

Amazingly simple, where is the super like button ? Thanks EU

[@Edspira]

Thank you!

[@tonton9598]

you really sound like chef john from the foodwishes channel

[@dilshoddubai7197]

:)))))))

[@nastelleleroux6016]

Really LOVE the way you explain things in your presentation. It is simple and understandable, even for someone with no prior experience. Keep it up! Also would you be able to do a presentation on Normal and Abnormal losses

[@Edspira]

Thank you for the kind words! I will try to get this video posted this fall semester. Take care and best wishes :)

[@Me-ji2pn]

you should explain how you got the annuity formula - talk about geometric progression

[@sanfran224]

I remember couple of yrs ago this channel was named education unlocked when I was taking my MBA now I'm studying for CFA

[@Edspira]

Sami, thank you for being a loyal follower. Good luck on the CFA!

[@sanfran224]

Thank you for unlocking the education

[@lizjk4]

What happens to the present value of an annuity when the interest is compounded more frequently?
For example, monthly or quarterly.

[@Edspira]

You adjust the number of periods and the interest rate to reflect the difference. For example, if you were to do quarterly you would multiply the number of periods by 4 (since there are quarters in one year) and divide the interest rate by 4. Then you compute the PV as you would normally.

[@IVideo8]

I need to calculate the right of use present value of lease payments, the lease payments increases by 3% a year, how can I do that?

[@SierraandSoufian]

Thanks so much for this video I was so confused this is very informative!!!

[@Edspira]

No problem!

[@mollisixx]

Then for present value of an annuity due would you multiply the present value of the ordinary annuity times (1+r)?

[@professorikram]

Yup. That's correct!

[@stevenoparaku2788]

Your lectures are explicit,and quite comprehensive.

[@rajaiyer79]

You have the best videos, not to mention handwriting about NPV, IRR, Annuities and Perp. THANK YOU!

[@Edspira]

Thanks!

[@brandonspiegel2293]

thanks for the great video!!!

[@vemundrye8999]

THANK YOU FOR THIS MY TEACHER KEEPS TALKING FOR HOURS AND HOURS AND HE STILL COULDNT EXPLAIN THIS S"!=#)

[@Daniel.Hernandex]

awesome video. made it seem soooo simple. thank you so much for your help.

[@gamrboy100]

Great video making this key concept very simple!

[@talatqamar8750]

superb

[@Edspira]

Thank you!

[@neilandrews7053]

Still very helpful to me today

[@impactodelsurenterprise2440]

So where does the 6% come from? What does it represent in the real world?

[@natashac3358]

the rate i think

[@Syndicate205]

The long term U.s treasury bond rate is the usual benchmark.

[@jeremystrauss3440]

Nothing will make this easy

[@wendyzhang1920]

Hi, anyone knows why 500 euros received each year (total amount of 25,000) but only have to invest about 420 euros

[@mostafamosalm7643]

This is amazing. Thanks

[@jeremystrauss3440]

This is rocket science

[@summerjho2781]

Thank you!

[@MyBerlin10]

thank you for explaining the "factor" element. that was throwing me previously

[@sumalathab5117]

Now only I came to know how to calculate present value of annuity

[@irisjiang4607]

Thank you so much for the video!

[@anjelenemartinez9047]

How did you get the 4.21236?

[@franksmith8012]

this is so helpful, thankyou!!

[@annalisa2341]

He is great

[@meierjoe]

say the last sentence earlier in this video

[@jamietan1122]

is this the same as growing annuity?

[@bhapampa]

Beautifully done!

[@clivetanakamahachi7379]

twabam

[@airaabrahano9535]

Thank you so muuch

[@shions3135]

amazing video

[@Edspira]

Thank you!

[@financialcounting5603]

Amazing way of clarifying what an annuity is and how to determine its PV! It has many useful applications such as determining the price of a mortgage, since it is a series of equal cash outflows.