Annuities
Things like super, or the “complete opposite of a compound interest loan”, where you accrue money via interest, and contnually withdraw money from that. Usually until it goes down to 0
You can use the exact same sequence to calculate Annuities as is done with Reducing Balance Loans.
Using Classpad Finance App:
N = Terms I% = Interest PV = The initial investment (Negative, it is going out of your account) PMT = Take out per-term (Positive, since you are taking money out of the account)
-28915.98
For finding the total amount of interest earned other an annuities lifetime;
- Find the total payed / retrieved from the annuitiy, this is the payment per period, (
) multiplied by the number of periods ( ) - then take away the final payment, this will get you the total amount paid out from the loan, including the amount paid out as a resut of your initial investment that we wil remove later.
(Final payment is the first negative value in the sequence, you can also find it by adding the first negative and the last positive i think) - You now have the total amount of money retrieved from the loan, take out your initial investment, leaving you with the interest.
PV is the principal, PV stands for Present Value at the beginning of the loan.