FVIFA is the future value interest factor of ordinary annuity worth $1 that earns i% interest rate for n number of periods. Here me Abraham A. will provide you with a study guide to explain and illustrate future value interest factor of ordinary annuity worth $1.
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FVIFA is an acronym for future value interest factor of an ordinary annuity that earns an i% interest rate for n number of periods. The FVIFA may be seen as interest earned on series of periodic end of peiod deposits in amount of $1 that earn compound interest. The compound interest means that the total interest earned by your savings includes the interest on deposits and on the interest itself. The more you increase the compounding frequency of interest the higher the earnings from your investment. The range of compounding frequencies include annual compounding all the way down to the daily compounding and the maximum interest is earned with continuous compounding or what is called infinite compounding of interest. Here I present you a FVIFA document as a Word file that discusses and explores the topic of FVIFA is quite detail explaing the FVIFA through real life lending situations. The document illustrates the FVIFA calculation using various formulas from data. The document is a must have for someone studying finance or those who are working as professional analysts.
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The "Value Pack" puts together the FVIFA guide along with the tadXL v0.8 add-in for Excel 2007, 2010 and 2013. The Excel add-in offers 14 financial functions to calculate various interest rates including one for finding FVIFA in Excel. Excel does not have any of its own financial functions to find future value interest factor for ordinary annuity of $1 that earns i% rate for n periods. Here one can simply type in an Excel FIVFA formula such as =tadFVIFA(10%, 10) to calculate the FVIFA . But then there are more options that are available in this financial function for compounding frequencies of interest, to define the length of the periods and for applying different discounting conventions. For example if we wanted to use monthly payments in amount of $1 that earn quarterly interest using mid-year discounting convention then we would use the Excel FVIFA formula as =tadFVIFA(10%, 10, 1/4, 1/12, 1/2) where 1/4 is used to tell the FVIFA function to use quarterly compounding of interest and 1/12 to say that we have monthly payments and 1/2 to mention mid-year discounting convention. A whole range of values may be used for compounding frequencies of interest such as annual, semi-annual, quarterly, monthly, weekly, daily or even infinite. The periods may be defined as a day, week, fortnight, month, quarter, year or even biennial. Any type of discounting convention may be applied such as full-year, mid-year, 1st quarter, 3rd quarter, biennial discounting. Thus the "Value Pack" offers more value for your money and is a must have resource for anyone studying finance and for those who are working as professional analysts.
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