All we ought to do now's solve the equation for P, and with just a little algebraic manipulation, we should have the components for the present value of an annuity:
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The problem we desire to look at now could be: How would we compute the existing worth of an annuity? Observe that the 2nd equation has no P in it, so we are unable to merely resolve for P as we did in the initial equation. In a sense, We are going to consider both of those equations collectively by considering the following predicament.
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