1. What is Present Value of Weekly Annuity?

The Present Value (PV) of a weekly annuity represents the current worth of a series of equal weekly payments to be received in the future, discounted at a specific interest rate. It helps determine how much a future stream of weekly payments is worth today.

2. How Does the Calculator Work?

The calculator uses the present value of annuity formula:

Where:

• \( PV \) — Present value of the annuity
• \( PMT \) — Weekly payment amount
• \( r \) — Weekly interest rate (in decimal form)
• \( n \) — Number of weekly payments

Explanation: The formula discounts each future payment back to its present value and sums them all together.

3. Importance of PV Calculation

Details: Calculating present value is essential for financial planning, investment analysis, loan amortization, and comparing different payment options.

4. Using the Calculator

Tips: Enter the weekly payment amount in dollars, the weekly interest rate as a decimal (e.g., 0.01 for 1%), and the number of weeks. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: How does weekly compounding differ from annual?
A: Weekly compounding results in slightly higher effective annual rates compared to annual compounding due to more frequent application of interest.

Q2: Can I use this for bi-weekly payments?
A: No, this calculator is specifically for weekly payments. For bi-weekly, you would need to adjust the rate and period count accordingly.

Q3: What's the difference between PV and FV?
A: PV calculates current worth of future payments, while FV calculates future worth of current investments/payments.

Q4: How do I convert annual rate to weekly?
A: Divide the annual rate by 52 (weeks in a year) for simple interest. For compound interest, use (1 + annual_rate)^(1/52) - 1.

Q5: What if my payments increase over time?
A: This calculator assumes constant payments. For growing annuities, a different formula would be needed.