Written By: Michael J. Sullivan,

This paper models the closed-form solutions of the present and future values of a constant-growth annuity in a manner that allows easy application of the time-value-of-money functions of a financial calculator. This model allows exact solutions and is valuable to practitioners and students for a number of applications that are often ignored in business classes, due to the inherent cumbersome mathematics. Example of constant-growth annuities include: retirement annuity contracts, insurance policies, leases, installment purchases, and court-awarded payments. KEY WORDS: Annuity, Valuation

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