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Present Value of a Growing Annuity

pv.Rd

This function calculates the present value (PV) of a growing annuity, taking into account the interest rate, growth rate, number of periods, payment amount, and timing of payments.

Usage

pv(rate, g = 0, nper, pmt, t = 1)

Arguments

rate

Numeric. The interest rate per period (e.g., 0.05 for 5%).

g

Numeric. The growth rate of payments per period (default is 0).

nper

Integer. The total number of periods (e.g., 10 for 10 periods).

pmt

Numeric. The payment amount per period.

t

Integer. Timing of payments:

  • t = 1: Payments occur at the end of the period (default).

  • t = 0: Payments occur at the beginning of the period.

Value

Numeric. The present value of the growing annuity.

Examples

# Example: Calculate PV for a growing annuity
pv(rate = 0.05, g = 0.02, nper = 10, pmt = 1000, t = 1)
#> [1] 8388.106