Annuity of Financial Mathematics

Have you calculated your own installment to be paid every month if you will buy the house by way of installment? If you ever, can you calculate the rest of your loan, if it has been repaid for n years from the payment of the house that you are installing? That's the kind of thing that's discussed in annuities.

Defenition of Annuity

An annuity is an amount of loan repayment of an equal amount paid out over a period of time, and consists of the interest and the installment.

Formula of Anuitas

A = a_n + b_n
a_n = a1(1 + i)ⁿ atau a_n = a_k(1 + i)ⁿ - k

Information :
A = Annuity
a_n = The nth installment
b_n = The nth interest
a_k = The kth installment

Example Question of Anuitas

A loan will be repaid on a yearly annuity. Please determine the magnitude of the annuity if the 6th installment and the 6th interest are $ 215,000 and $ 85,000!

Answer :
a₆ = $215,000
b₆ = $85,000

A = a_n + b_n
A = a₆ + b₆
A = $215,000 + $85,000
A = $400,000

So the annuity value is $ 400,000.

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