Now, let us pick the sizing of Pete's annuity payment (m) and Permit the annuity operate its class. Could it be not legitimate that we could mess around While using the sizing of Pete's Original financial institution deposit (P) until finally the two accounts had precisely the same worth at the conclusion of this experiment? When this ailment is achieved, we could mention that Pete's Original deposit (P), that's a existing benefit, correlates With all the existing worth of Nick's annuity, because it presents the identical potential price below equivalent conditions.
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That means we can set the best facet of the main equation equivalent to the appropriate aspect of the other to acquire:
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