Anualidades Anticipadas - Clase 16 - Matemáticas Financieras

Before we begin, I want to let you know that in just two weeks, the ebook "50 Financial Math Exercises Developed Step by Step" will be available for free to our blog subscribers. You can subscribe with just your name and email address at www.finanzas.com. Now, let's get on with the lesson. Hello, hello, hello! My name is

Eduardo Aponte, and we're going to study financial math. Welcome! Annuities due. In previous lessons

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of $60 and they charge quarterly interest of 4%. The following is the cash flow. The horizontal line is the timeline, and each arrow indicates a cash flow. The zero indicates the present, and the 1, 2, TR, etc., indicates the end of each period. In this case, the four indicates the end of the fourth quarter, as well as

the beginning of the fifth period or quarter. In this case, if we use the present value formula that we know, we would be taking the cash flows to an imaginary period of -1 to bring them to the zero period, that is, the present value. We will only have to multiply the result by 1 plus

the periodic interest rate [Music] due in the lesson 14 We saw the formula for the value of an annuity where the present value was equal to the annuity multiplied by one plus the periodic interest rate raised to the power of n - 1 divided by the periodic interest rate multiplied by 1 plus the

periodic interest rate raised to the power of the number of periods. Now, to have the formula for the present value of an annuity due, we simply multiply by one plus the periodic interest rate. Thus, the formula would be: where bp is the present value, a is the value of the annuity, y is the