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mgf1107lecture28 - MGF 1107 EXPLORATIONS IN MATHEMATICS...

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MGF 1107 – EXPLORATIONS IN MATHEMATICS LECTURE 28 Annuities To this point we have considered investing or borrowing a fixed amount of money one time, and considering how the amount changes over time given the effects of simple and compound interest. Annuities represent a series of payments made at regular time intervals. For example if you decide to invest $50 a week, or pay off a loan with payments of $100 a month. In this lecture we will consider fixed annuities , where the same payment is made at each time period. In particular we will focus on deferred annuities , where payments are made to produce a lump sum payout at a later date (a college trust fund or a retirement fund being typical examples), and installment loans where a lump sum is paid followed by a series of regular payments (car loans and mortgages being prime examples). Ex. (10.21)
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