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Introduction
Annuity: A series of payments made at
equal intervals of time.
Examples: House rents, mortgage
payments, instalment payments on
automobiles and interest payments on
money invested.
.
R- The periodic payment of the annuity
n- The numer of payments made
i- the interest rate per payment interval
S- The accumulated value of the annuity; the amount of money you will
have at the end of the annuity’s term.
A- The present value of the annuity or discounted value, the amount of
money which must be set aside today to allow a specified payment for a
predetermined period of time.
Terms used in Annuity