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If our complete number of durations is N, the equation for the future worth of the cash stream series may be the summation of person cash flows:
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The accounting equation is definitely the cornerstone of double-entry accounting, guaranteeing that each economical transaction affects at the least two accounts and keeping the equation's stability.
Consequently, yet another (one + in) is present in Just about every cash circulation multiplication. With compounding m instances for every time period we get there at in and n by setting r since the periodic charge and t as the period amount to compute in = r/m and n = mt; we can now compute the PV starting off with the longer term worth components
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