A period certain annuity is a series of periodic payments for a given term, independent of any life contingency.
General formula
The present value of an 𝑛–year period certain annuity of 1 per year, payable at the beginning of the year is calculated by the general formula:
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Note: |
This
is the same as Excel’s PV function with the following parameters: |
If payments are made 𝑚 times per year, the formula becomes:
|
Note: |
This
is the same as Excel’s PV function with the following parameters: |
Excel functions
Click here
to see the various Excel functions to handle period certain annuities.