Discussion
The annuity or present worth factor for a constant annual saving is
Answer: C
Correct answer: the sum of the individual discount factors over the life
A level annual saving is a series of payments, each discounted from its own year, so the factor converting the whole stream to a present value is the sum of those individual factors. Written in closed form it is \( [1-(1+i)^{-n}]/i \), and the capital recovery factor is its reciprocal.
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