Annuities are investment products that make regular payments to investors over a specified period of time. Investors need to know an annuity's periodic payment amount, total payout amount and total interest payout over the life of the contract to gain a greater understanding of the annuity's ex...
Obviously, my calculation is simplistic because we all die at some point. My calculation is based on cash flow into perpetuity. To counteract the perpetuity, I assign a Probability of Payout percent. Further, we all won't have surviving spouses to continue receiving the pension long after we'...
For example, assume a $500,000 annuity with a 4% interest rate that will pay a fixed annual amount over the next 25 years. The manual formula is Annuity Value = Payment Amount x Present Value of an Annuity (PVOA) factor. The PVOA factor for the above scenario is 15.62208. Thus, ...