What is the AAA formula?
The AAA formula is a formula used to calculate the present value of an annuity. It stands for "Annuity Due Present Value of an Annuity Due," and is expressed as PV = A/[(1+r)^n - 1]/r, where A is the periodic payment, r is the interest rate, and n is the number of periods.
Never seen that formula stated by the robot tutor for an Annuity Due.
In such an annuity, the payments are made at the beginning of the period,
so the simplest way is to annualize your problem and adjust the common
formula for a standard annuity, where the payments are at the end the
interest period.
e.g. What is the PV of a series of 10 annual payments of $1000 if the first
payment is made right now, and the rate of interest is 3% per annum
PV = 1000 + 1000(1 - 1.03^-9)/.03 = 8786.11
or , using the formula used in some texts:
PV = 1000(1 - 1.03^-10)/.03 * 1.03 = 8786.11
Using the formula used by the AI gives us 96,922.78 , which is a nonsense
answer.