212 ARITHMETIC. 



EXAMPLES, 



I. What is the amount of aji annuity of 40I. to con- 

 thiuc 5 years, allowing 5 per cent, compound inferest ? 



i-f i-o5+ro5| +i*o5|+i'o5| = 5*525^3125 



5-52563125 

 40 



6'o6 



Ans. 22 il. 6cl 



2. If 5oiv yearly rent, or. annuity, I>e forborn 7 years, 

 what will it amount to, at 4 per cent, per annum, com- 

 pound interest ? • ' Ans. 395!, 



'Z'o find ihc present Value of Annuities at Ccmpound Iniei'esU' 



RULE.* 



I. Divide the anmiity by the ratio, or the amount of 

 iL for one year, and the quotient will be the present 

 worth of I year's annuity. 



2. Divide 



* The reason of this . rule is evident from tlie nature of the 

 question, and v/hat was said upon the same subject in the purchase 

 ing of annuities at simple interest. 



Let p = present worth of the annuity, and the other letters as 



r^ I 



before, then as the amount = X'?? and as the present wortli 



r — I 



or 



