lifecontingencies (version 1.3.12)

decreasingAnnuity: Function to evaluate decreasing annuities.

Description

This function return present values for decreasing annuities - certain.

Usage

decreasingAnnuity(i, n,type="immediate")

Value

A numeric value reporting the present value of the decreasing cash flows.

Arguments

i

A numeric value representing the interest rate.

n

The number of periods.

type

The Payment type, either "advance" for the annuity due (default) or "arrears" for the annuity immediate. Alternatively, one can use "due" or "immediate" respectively (can be abbreviated).

Author

Giorgio A. Spedicato

Warning

The function is provided as is, without any guarantee regarding the accuracy of calculation. The author disclaims any liability for eventual losses arising from direct or indirect use of this software.

Details

A decreasing annuity has the following flows of payments: n, n-1, n-2, ..., 1, 0.

References

Broverman, S.A., Mathematics of Investment and Credit (Fourth Edition), 2008, ACTEX Publications.

See Also

annuity,increasingAnnuity,DAxn

Examples

	#the present value of 10, 9, 8,....,0 payable at the end of the period
	#for 10 years is
	decreasingAnnuity(i=0.03, n=10)
	#assuming a 3% interest rate
	#should be
	sum((10:1)/(1+.03)^(1:10))