How to Calculate and Solve for Annual Worth | Gradient Series | Economic Equivalence
Last Updated on April 6, 2024
The image above represents annual worth. To calculate annual worth, three essential parameters are needed and these parameters are Gradient Amount (G), Interest Rate (i) and Number of Years (N).
The formula for calculating annual worth:
A = G[((1 + i)N) – iN – 1] / [((1 + i)N) – 1]
Where:
A = Annual Amount or Worth (Conversion Factor)
G = Gradient amount
i = Interest Rate
N = Number of Years
Let’s solve an example;
Find the annual worth when the gradient amount is 11, the interest rate is 0.2 and the number of years is 12.
This implies that;
G = Gradient amount = 11
i = Interest Rate = 0.2
N = Number of Years = 12
A = G[((1 + i)N) – iN – 1] / [((1 + i)N) – 1]
So, A = 11[((1 + 0.2)12) – 0.2(12) – 1] / [((1 + 0.2)12) – 1]
A = 11[((1.2)12) – 2.40 – 1] / [((1.2)12) – 1]
A = 11[8.916 – 2.40 – 1] / [8.916 – 1]
Then, A = 11[5.516] / [7.916]
A = 11 x 0.696
A = 7.66
Therefore, the annual worth is ₦7.66.
Read more:How to Calculate and Solve for Future Worth | Equal Payment Series | Economic Equivalence
How to Calculate Annual Worth | Gradient Series Using Nickzom Calculator
Nickzom Calculator – The Calculator Encyclopedia is capable of calculating the annual worth.
To get the answer and workings of the annual worth using the Nickzom Calculator – The Calculator Encyclopedia. First, you need to obtain the app.
You can get this app via any of these means:
Web – https://www.nickzom.org/calculator-plus
To get access to the professional version via web, you need to register and subscribe for NGN 1,500 per annum to have utter access to all functionalities.
You can also try the demo version via https://www.nickzom.org/calculator
Android (Paid) – https://play.google.com/store/apps/details?id=org.nickzom.nickzomcalculator
Android (Free) – https://play.google.com/store/apps/details?id=com.nickzom.nickzomcalculator
Apple (Paid) – https://itunes.apple.com/us/app/nickzom-calculator/id1331162702?mt=8
Once, you have obtained the calculator encyclopedia app, proceed to the Calculator Map, then click on Economics under Engineering.
Now, Click on Economic Equivalence under Economics
Now, Click on Annual Worth under Economic Equivalence
The screenshot below displays the page or activity to enter your values, to get the answer for the annual worth according to the respective parameters which are the Gradient Amount (G), Interest Rate (i) and Number of Years (N).
Now, enter the values appropriately and accordingly for the parameters as required by the Gradient Amount (G) is 11, Interest Rate (i) is 0.2 and Number of Years (N) is 12.
Finallly, Click on Calculate
As you can see from the screenshot above, Nickzom Calculator– The Calculator Encyclopedia solves for the annual worth and presents the formula, workings and steps too.
