(71B) Present Value of a Growing Annuity - Printable Version +- HP Forums (https://www.hpmuseum.org/forum) +-- Forum: HP Software Libraries (/forum-10.html) +--- Forum: General Software Library (/forum-13.html) +--- Thread: (71B) Present Value of a Growing Annuity (/thread-16115.html) (71B) Present Value of a Growing Annuity - Eddie W. Shore - 01-03-2021 03:44 PM Introduction Today we are going to calculate the present value of a growing annuity. Unlike most annuities where the payment is constant, in a growing annuity, the payment increases each period. For this particular blog, we are working with annuities that payments increase by a growth percent (g%) each period. The annuity has an different interest rate (r%) in which payments are discounted. Variables: P = base payment (the first payment) g = growth rate per period r = interest rate per period n = number of periods PV = present value Present Value of a Growing Annuity - Ordinary PV = P/(1+r) * (1 - w^n)/(1 - w) Present Value of a Growing Annuity - Due PV = P * (1 - w^(n+1))/(1 - w) HP 71B Program: PVGROW Note: This is for both ordinary and growing annuities due. Code: ```100  DESTROY P,G,R,W,A,C 105  INPUT "PAYMENT? "; P 110  INPUT "INTEREST? "; R 115  R=.01*R 120  INPUT "GROWTH? "; G 125  G=.01*G 130  W=(1+G)/(1+R) 135  INPUT "N? "; N 140  INPUT "DUE?(Y=1,N=0) ";C 145  IF C=1 THEN 200 150  IF C=0 THEN 300 ELSE 140  200  A=P*(1-W^(N+1))/(1-W) @ ! DUE 205  GOTO 400 300  A=P*(1-W^N)/((1+R)*(1-W)) @ ! ORD 305 GOTO 400 400 PRINT "PV ="; A``` Example: Base Payment: P = 20.00 Interest Rate: r = 4% Growth Rate: g = 5% n = 5 Ordinary Growing Annuity Result: PV = 98.02 Growing Annuity Due Result: PV = 122.92 Source: "Present Value of a Growing Annuity" financeformulas.net https://financeformulas.net/Present_Value_of_Growing_Annuity.html Retrieved December 13, 2020. More information: http://edspi31415.blogspot.com/2021/01/swiss-micros-dm42-and-hp71b-present.html