QUESTION 2 Present value of annuity formula can also be written like this: PVA = \frac{C}{r} - \frac{C}{r(1+r)^T}. Explain why the first term minus the second term gives the present value of an annuity.
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An annuity is a series of equal payments made at regular intervals over a specified period of time. The present value of an annuity is the current value of all future cash flows from the annuity, discounted at a specific rate of return. In other words, it is the Show more…
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