The future value of the annuity and the future value of an annuity due. Introduction: Annuity: An annuity refers to the fixed cash flows that are received or paid by a person at defined intervals. This series of cash flows occur for a given time period. The two kinds of annuities are the annuities having a fixed rate and annuities having a variable rate. The payment of annuities is made at the end of the year. Annuity Due: The annuity due refers to the fixed cash flows that are received or paid by a person at defined intervals. It is same as annuity but the annuity due is paid at the beginning of the year.

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Chapter 5, Problem 6P

Summary Introduction

To determine: The future value of the annuity and the future value of an annuity due.

Introduction:

Annuity:

An annuity refers to the fixed cash flows that are received or paid by a person at defined intervals. This series of cash flows occur for a given time period. The two kinds of annuities are the annuities having a fixed rate and annuities having a variable rate. The payment of annuities is made at the end of the year.

Annuity Due:

The annuity due refers to the fixed cash flows that are received or paid by a person at defined intervals. It is same as annuity but the annuity due is paid at the beginning of the year.

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