Example: Computing Present Value Of Variable Cash Flows - Texas Instruments Calculator User Manual

Perpetual annuity due
Because the term (1 + I/Y / 100)
approaches zero as N increases, you can use these equations to solve for
the present value of a perpetual annuity:
• Perpetual ordinary annuity
PMT
PV = --------------------------- -
(
I/Y
• Perpetual annuity due
=
PV PMT
Example: Computing Present Value of Variable
Cash Flows
The ABC Company purchased a machine that will save these end-of-year
amounts:
Year
Amount
Time-Value-of-Money and Amortization Worksheets
-N
) 100 ÷
PMT
+
--------------------------- -
( ) 100 ) ⁄
I/Y
1 2
$5000 $7000
in the present value annuity equations
3
$8000
4
$10000
31