As the number periods goes up with the same payment,

we see that the present value goes up.

So what that's in effect is, you're getting the payment over more years, so

the value of that annuity's going to go up.

Now if you look at the same number of years, but changed the interest rate.

So if you look at 30 years for 5%, 15% and

25%, what you'll notice is the present value goes down.

So holding the payment constant and

the number of years as the interest rate goes up.

The present value goes down and of course vice versa.

And then the last three wells show you see what,

shows you what happened if we increase the payment.

So if you compare 5% 30 years 5,000 to 5% 30 years

10,000 you see the present value goes from 76,862 to 153,725.

What happens there is that as the payment goes up,

you're getting a bigger amount each year.

Which makes the value, the present value of that annuity go up.

So what we find is the present value is inversely related to the discount rate or

inflation rate.

As inflation goes up, present value goes down.

As inflation goes down, present value goes up.

And that's because inflation affects very directly how much that payment is

going to be worth to you in current dollars.

The present value is positively related to the payment and the number of periods.

And that's because with annuity, you're getting the same payment every year.

So if you get a bigger payment or

you get more payments, it's going to increase the present value.