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The query we want to consider now is: How would we work out the present value of an annuity? See that the second equation has no P in it, so we can't simply just remedy for P as we did have a peek at this site in the initial equation. In a way, We're going to contemplate both equally equations alongside one another by considering the subsequent situation.

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1. Starting hard cash balance has the last closing income find more info harmony of the last period of time (the remaining cash from the last year’s earning)

Which means we can check my reference easily set the correct aspect of the 1st equation equivalent to the right facet of the other to acquire:

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