Note: In order to use the spreadsheet examples, you need to download Business Functions
|SumEGAnn (TermYrs, AnnGrowthRate)|
|Sum of an exponentially growing annuity (growth annually in arrear).|
|This function calculates the nominal sum of an Exponentially Growing Annuity. See also PVEGAnn, which calculates a Present Value.|
|Unary||Unary Value ( ie value of $1)|
With any annuity formula involving GROWTH, the key confusion is WHEN the growth commences. The answer is - at the end of year 1. But that does NOT mean the YEAR 1 payment is grown/inflated! In fact it means that growth starts at year 1, and therefore the first grown payment is at YEAR 2. So the payments are: Time 0 - 0, Time 1 - 1, Time 2 - (1+g), Time 3 - (1+g)^2, etc.