The formula to calculate the Present Value of Annuity (PVAnnuity) is:
\[ PVAnnuity = \left(\frac{p}{IR}\right) \left(1 - \left(\frac{1}{(1 + IR)^{nMonths}}\right)\right) \]
Where:
The Present Value of Annuity is the current value of a set of cash flows in the future, given a specified rate of return or discount rate.
Let's assume the following values:
Using the formula:
\[ PVAnnuity = \left(\frac{28000}{5.5}\right) \left(1 - \left(\frac{1}{(1 + 5.5)^{13}}\right)\right) \]
Evaluating:
\[ PVAnnuity = 5090.91 \]
The Present Value of Annuity is 5090.91.
| Monthly Payment | Interest Rate | Number of Months | Present Value of Annuity |
|---|---|---|---|
| 27000 | 5 | 12 | 5,400.00 |
| 27000 | 5 | 13 | 5,400.00 |
| 27000 | 5 | 14 | 5,400.00 |
| 27000 | 5.5 | 12 | 4,909.09 |
| 27000 | 5.5 | 13 | 4,909.09 |
| 27000 | 5.5 | 14 | 4,909.09 |
| 27000 | 6 | 12 | 4,500.00 |
| 27000 | 6 | 13 | 4,500.00 |
| 27000 | 6 | 14 | 4,500.00 |
| 28000 | 5 | 12 | 5,600.00 |
| 28000 | 5 | 13 | 5,600.00 |
| 28000 | 5 | 14 | 5,600.00 |
| 28000 | 5.5 | 12 | 5,090.91 |
| 28000 | 5.5 | 13 | 5,090.91 |
| 28000 | 5.5 | 14 | 5,090.91 |
| 28000 | 6 | 12 | 4,666.67 |
| 28000 | 6 | 13 | 4,666.67 |
| 28000 | 6 | 14 | 4,666.67 |
| 29000 | 5 | 12 | 5,800.00 |
| 29000 | 5 | 13 | 5,800.00 |
| 29000 | 5 | 14 | 5,800.00 |
| 29000 | 5.5 | 12 | 5,272.73 |
| 29000 | 5.5 | 13 | 5,272.73 |
| 29000 | 5.5 | 14 | 5,272.73 |
| 29000 | 6 | 12 | 4,833.33 |
| 29000 | 6 | 13 | 4,833.33 |
| 29000 | 6 | 14 | 4,833.33 |