What is an annuity table?
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Anuit table usually helps people to calculate the group of funds that regularly pay to a person for money, such as wins in lotteries or pension funds. When a person gets money for a certain period of time that runs from now to a certain time, the total value of the money he earns is smaller in comparison with the money he gets as a flat -rate amount right now. This is because money from later payments does not earn interest and loses value with inflation. In the financial ling, the present value of the annuity is lower than the current value of the payment with a flat sum. The Annuity table helps people calculate the current value of annuity, taking into account the money lost by not earning interest. For the use of the Annuity table, the person must know the interest rate and the number of rewards during the annuity of the annuity. It will find the corresponding interest rate and the number of payment periods in the table to find an annuity factor. The person then multiplies the amount of each payment by an annuity factor to find the current HoDnota Anuity.
For example, consider a man who decides to get a lottery of $ 8,000 in US dollars for eight payments of $ 1,000 at the end of each year and the interest rate is 4 percent. It should find "4 percent" along the top of the annual table and the numbers "8" along the left column of the same table and then look at the box where both meet, which should contain "6.7327". By multiplying $ 1,000 USD $ 6.7327, it receives $ 6.732.70, USD, which is the current annuity value.
TheAnuite table simplifies the process of calculating the current value of the annuity, which otherwise includes a complicated writer. However, the result may not be as accurate as the use of the formula, depending on how many decimal places the annual factors have. For simple calculations, the Annuity table is often sufficient.
The most common form of annuity table helps people calculate the current value of common annuity that applies nand the end of each period. Another type of annuity table helps people develop the current value due to annuity, which is valid at the beginning of each period. Other Annuity tables help people find the future value or maturity of the annuity investment, which allows investors to make periodic payments and get back the lure amount with interest at the end of the investment duration.