12/24/2023 0 Comments Cashnotify gradientPeriods is the number of compounding periods and payments that are made.Īn initial payment of $100 increases by the same amount each period over 10 periods at a compounding rate of 2.2%.Rate is the rate used to compound each period.For a percentage increase see our increasing payment calculator. An initial payment of $100 will be $200 in period 2, $300 in period 3, and so on. It is also the amount that the payment increases each period. Initial Gradient Payment is the initial payment that is made.Present Value = Initial Gradient Payment x ((1 + rate) periods – (rate x periods) – 1) ÷ (rate 2 x (1 + rate) periods)įuture Value = Initial Payment x ((1 + rate) periods – (rate x periods) – 1) ÷ rate 2Įquivalent Equal Payment = Initial Payment x ((1 ÷ rate) – (periods ÷ ((1 + rate) periods – 1 Formula – How the Present and Future Values of a Gradient Payment are Calculated ![]() ![]() The future value is the value of at the end of all time periods. The present value is the value in today’s dollars of the increased payment. In time period 2 it is $200, time period 3 it is $300, time period 4 it is $400. Definition – What is a Gradient (Linear) Payment?Ī gradient payment (also known as linear payment growth) is a payment that increases by a regular amount.Īs an example, in the first time period, the payment is $100.
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