5.6 Highlights

  • Annuity is a sequence of equal payments made at equal periods of time.
  • When the payments are made at the end of the time period, the annuity is called an ordinary annuity.
  • When the payments are paid at the beginning of each payment period, the annuity is called an annuity due.
  • There is a significant difference between the present and future value for an ordinary annuity and an annuity due.

 

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