Question

Discuss the difference between a growing annuity and a growing perpetuity. Provide an example of each. Also explain the annuity transformation method.

Answer 1

Answer:-

Growing Annuity:-

It alludes to sum will be expanded for each installment. At the point when installments of annuity were fixed then installments of the growing annuity will be expanded to the steady rate.

Example on the off chance that I need to begin an assembling business, I will expect the more salary until I sell them.

Growing perpetuity:-

It alludes to all the occasional installments increments at an equivalent development immediately and they got at a limitless time. This was gotten from the extremely troublesome mathematical computations.

Example schools need some expanding reserve each year so as to give grants in light of the fact that consistently costs would be expanded.

Annuity transformation methods is characterized as the method which changes over ordinary annuity to the annuity due sum.

Right now the conflict streams entered in a line and estimation of the present and future qualities will be done later I ought to be duplicate the appropriate response with (1+i). This method was utilized to do the unpredictable issues.

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