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Unformatted text preview: c Kendra Kilmer November 8, 2011 Sections 5.2 and 5.3 - Annuities Definition: An annuity is a sequence of payments made at regular time intervals. In general, the amounts in the payments need not be equal. Definition: An Ordinary Annuity is an annuity in which payments are made of at the end of each payment period. Definition: An Annuity Due is an annuity in which payments are made at the beginning of each payment period. Definition: A Simple Annuity is an annuity in which the payment period coincides with the conversion period. In this course, we will study annuities with the following properties: 1. The terms are given by fixed time intervals. 2. The periodic payments are equal in size. 3. The payments are made at the end of the payment periods. 4. The payment periods coincide with the interest conversion periods. Example 1: Since you are a poor college student you currently have $10 in your bank account. If you put $50 each month into your bank account that earns 3 . 45% compounded monthly, how much would you have when...
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- Fall '08
- payments, bank account, Kendra Kilmer