The table below summarizes the equivalency factors . The Name column shows the traditional names for the factors. Each factor has a formula that depends on i, the interest rate per compounding period, and N, the number of compounding periods in the interval. The factors are valid for i strictly greater than zero and N integer.
Factor | Name | Formula | Purpose |
(F/P, i, N) | Single payment compound amount factor | Moves a single payment to N periods later in time | |
(P/F, i, N) | Single payment present worth factor | Moves a single payment to N periods earlier in time | |
(A/F, i, N) | Sinking Fund factor | Takes a single payment and spreads into a uniform series over N earlier periods. The last payment in the series occurs at the same time as F. | |
(F/A, i, N) | Uniform Series Compound Amount factor | Takes a uniform series and moves it to a single value at the time of the last payment in the series. | |
(A/P, i, N) | Capital Recovery Factor | Takes a single payment and spreads it into a uniform series over N later periods. The first payment in the series occurs one period later than P. | |
(P/A, i, N) | Uniform Series Present Worth Factor | Takes a uniform series and moves it to a single payment one period earlier than the first payment of the series. | |
(P/G, i, N) | Arithmetic Gradient Present Worth Factor | Takes a arithmetic gradient series and moves it to a single payment two periods earlier than the first nonzero payment of the series. | |
(A/G, i, N) | Arithmetic Gradient to Uniform Series Factor | Takes a arithmetic gradient series and converts it to a uniform series. The two series cover the same interval, but the first payment of the gradient series is 0. |
Comments are closed.