ANNUITY

is a fixed sum of money

paid to someone at
each regular interval
SIMPLE ANNUITY
interest conversion or
compounding period is equal or
the same as the payment interval
Example:
Payments are made at the
end of each month for a loan
that charges 2% interest
compounded monthly
GENERAL ANNUITY
interest conversion or
compounding period is
unequal or not the same
as the payment interval
Example:
Payments are made at the
end of each month for a loan
that charges 2% interest
compounded annually.
ORDINARY ANNUITY
annuity in which the
periodic payment is
made at the end of
each payment interval
Example:
Huaze Lei’s monthly
payment is P35,100.00
at the end of each
month.
ANNUITY DUE
annuity in which the
periodic payment is
made at the beginning
each payment interval
Example:
Ximen’s rent for the
apartment is P7,000.00
and due at the beginning
of each month.
Determine the annuity
1. Cassie’s monthly
payment is ₱35,148
at the end of each
month.
Aaron’s mother saved
₱35,148 at the end of
every 6 months in an
education plan that earns
6% per year compounded
semi- annually.
The latest cellphone sells
for ₱5,000 down payment
and ₱900.00 every end
of each quarter for 3
years at rate 8%
compounded monthly.
Mr. John needs ₱30,000 in 2
years to start their own
business. They plan to save
money by making monthly
deposits at the end of each
month at 8% per year
compounded quarterly.
Zyrone bought a brand new
car for ₱500,000 down
payment and pay ₱20,000
every first day of each month
for 3 years at 8% compounded
semi- annually.
Term of an annuity- time
between the first payment
interval and last payment
interval
Regular or Periodic payment
the amount of each payment
Amount of an Annuity-
sum of future values of all
payments to made during the
entire term of the annuity
Present value of an Annuity
Sum of present values of all
payments to made during the
entire term of the annuity
Payment Interval- the time
between successive payments
SIMPLE ORDINARY
SIMPLE ANNUITY DUE
SIMPLE DEFERRED
GENERAL ORDINARY
GENERAL ANNUITY DUE
GENERAL DEFERRED