# The difference between the present value of an annuity and its final value

2022-05-15 By Different calculation methods: annuity final value calculation formula for F = A * (F/A, I, n) = A * (1 + I) n – 1 / I, which (F/A, I, n) called “annuity” terminal value coefficient;Annuity present value calculation formula for P = A * (P/A, I, n) = A * (1 – (1 + I) n] / I, the (P/A, I, n) called “annuity present value coefficient”.1. The final value coefficient of annuity refers to the sum of the principal and interest of the same amount of income or expenditure at the end of each period within a certain period.The annuity final value coefficient is [(1+ I)^n-1]/ I.Mostly used in economics;Finance;Construction engineering economy and other fields.2. The final value of an annuity is the sum of the principal and interest paid at the time of the last payment. It is the sum of the final value of the compound interest paid each time.Compound interest to the final value at the end of the last period, and then add up to the final value of the annuity.If the annuity is equal to the amount of the lump sum savings deposit, then the final annuity value is the lump sum of the lump sum savings deposit.3. The present value of an annuity is used to calculate the monetary value.Given the annuity and coefficient, calculate the present value of the annuity and get the value of money at a certain point, which is the basic function of the present value of the annuity;Compare investment options.Investment/financing options can be compared according to different monetary values.