0.5 The Derivation of Ordinary Annuity Factors

You are given the following information. Column by column, complete the table by filling in the appropriate future value factors (“FVF”), the future values of each respective cash flow (“FVCF”), as well as the same for the present value factors and cash flows (“PVF” and “PVCF”). Once completed, add up the columns at the bottom.


3-year annuity

$100 received per year

Annual Discounting/Compounding

Factor = R = .10

Period Cash Flow FVF FVCF PVF PVCF
1 $100
2 $100
3 $100
Annuity Factors
Dollar Values


Note that here we are dealing with “ordinary” annuities, which means that all the cash flows in the series are received at the end of the relevant period. Soon we will examine another convention.


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Corporate Finance Copyright © 2023 by Kenneth S. Bigel is licensed under a Creative Commons Attribution 4.0 International License, except where otherwise noted.

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