Present value of a deferred annuity
Input(s)
\(i_{e}\): Effective Interest or Discount Rate (fraction)
\(\mathrm{t}:\) Time (year)
\(A_{v}\): Annuity (currency unit)
Output(s)
\(P_{v}\): Present Value of Deferred (currency unit)
Formula(s)
\[
P_{v}=A_{v} * \frac{\left(\left(1+i_{e}\right)^{t}\right)-1}{i_{e} *\left(1+i_{e}\right)^{t}} *\left(\frac{1}{\left(1+i_{e}\right)^{t-2}}\right)
\]
Reference(s)
Mian, M. A. 2011. Project Economics and Decision Analysis Volume 1: Deterministic Models, Second Edition. Tulsa, Oklahoma: PennWell Corporation. Chapter 2, Page: 62.