Hello. I have been banging my head on the wall with this problem and would appreciate some help.

I know the general formula for calculating the present value of an annuity (due or ordinary) can be found here:

Present Value of an Annuity and I completely understand everything on that page which is assuming that interest is compounded annually.

Where I run into trouble is to change the assumption that interest is compounded, say, daily. I would think it is as easy as saying i = rate/365 and n = number_of_years * 365. However, using those numbers the formula does not work out to a realistic answer.

Can somebody help? Thanks!