Annuity : An annuity refers to a sequence of fixed cash flows, received or paid by a person at a specific frequency. These cash flows occur for a specified period of time. The annuity can be categorized as a limited period annuity and a lifetime annuity. In a limited period annuity, the cash flows are generated or paid at regular intervals for a specified period of time. In lifetime annuity, the cash flows are generated or paid for the lifespan of the person To Explain: The examples of the annuity.

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Chapter 4, Problem 6CT

Summary Introduction

Annuity:

An annuity refers to a sequence of fixed cash flows, received or paid by a person at a specific frequency. These cash flows occur for a specified period of time. The annuity can be categorized as a limited period annuity and a lifetime annuity. In a limited period annuity, the cash flows are generated or paid at regular intervals for a specified period of time. In lifetime annuity, the cash flows are generated or paid for the lifespan of the person

To Explain:

The examples of the annuity.

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