Business Math - Finance Math (10 of 30) Future Value of an Annuity (End of Pay Period)
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- Опубліковано 11 вер 2024
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In this video I will explain and give an example of future value of an annuity (end of pay period).
Next video in this series can be seen at:
• Business Math - Financ...
Its difficult for me to understand of math and any subject, I really like your videos, it help me to have a perfect score in my subject math 3 in College. When my teacher discuss about this I do not understand while other students they understand my teacher but me I can't I do not know why haha :) Thanks a lot teacher Michael.
Wow! Every high school and college student should be watching this! 🎉
Yes, we should all realize how to invest for the future.
thank you so much for the effort. these videos are so good and i like how you make it short, i just think it's better this way than long videos. these videos helped me and still helping me get through this subject in university. the professor teaching it in my uni is good but i didn't understand the concepts like i did here so thank you again.
Glad you like our style. Yes, the purpose was to get the concept across in 5 - 10 minutes.
I really appreciate your videos because am being helpful
Glad you like them!
Thank you so much Michel!!!!!!!
We assume on average earn 6% bi-weekly or yearly? The % interest rate is based upon your periodic payment?
This is a yearly percentage not dependent on the periodic payment.
5:47
40 years: it would be over $860.000. Wow :))
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Great video, thanks!
Is there a link between the effective interest rate and this formula?
Besides the t power, that's the effective interest rate, so it's like the effective rate divide by the actual rate, times the number m. Is this essentially what this formula is doing? Taking a ratio of effective interest to actual interest to the payments?
The effective interest rate is the rate calculated when gains from compounding are included. This is a advertisement method to make it look like you are getting a higher interest rate. That is not the same as the interest rate shown in the video (which is the true interest rate).
@@MichelvanBiezen I mean that (1+r/m)^mt - 1 looks like (1+r/m)^m - 1. So if you only invest for one year then the formula is pp×m×r_eff/r
isnt it suppose to be 24 payments per year? because twice a month multiply by 12 months is 24??
Bi-weekly means every two weeks. Since there are 52 weeks in a year, 52/2 = 26.
Ah you are so right! Thx for explaining! :))
Mmh
I am an engineering student, and I never study any business related subject. I found myself struggling to understand the concept of future value...
Okay, I think it means how much a person will receive in the future if he periodically saves money at a certain interest rate.
Thanks!
Why is this called an annuity?
good
awesome saucesome
Does this also apply to index funds? Let's say someone is taking out a certain amount of money out of their paycheck to put in their index fund bi-weekly.
Thanks for the videos, you should write a book.
Yes, with the difference that the interest rate, always changes (and can be negative) depending on how the securities that are purchased are performing in an ever changing market. Thus an expected rate of gain is assumed over a long term period.
SIMPLICITY
I would like to know how much the bank makes from my money over the 10 years
They make plenty!
It is 52 weeks in a year
Yes, and in this video the contributions are bi-weekly (therefore 26 contributions per year)
i couldn't find it out.
Looks good on paper, the banks giving you 6% interest rate per annum or a year. In the real world, it's more like 0.6% or even 0.06%...hahaha, but if you borrow, they'll charge you 6% on mortgage, or 25% on credit card!
I remember the days that we could get 10% interest in the bank. That was a long time ago. Now it doesn't pay much to keep money in the bank, so you need to look for other investments to make money like that.
109,506.64
What is this number for?
cool but never invest in annuities LOL