Define Ordinary Annuity

An annuity paid in a series of more or less equal payments at the end of equally spaced periods.

Define ordinary annuity. What is an annuity How is it defined What is the difference between an ordinary annuity and an annuity due. Equal payments paid at regular intervals over a stated time period D. If the payments are made at the end of the time periods so that interest is accumulated before the payment the annuity is called an annuity-immediate or ordinary annuity.

All payments are in the same amount such as a series of payments of 1000. An ordinary annuity is best defined by which one of the following. Future value of an ordinary annuity definition.

Get Homework Help on 1. For example an ordinary annuity with a monthly interval would make its payments at the end of the month. A series of equal payments made at the end of each payment period.

This is different from an annuity due which is paid at the beginning of each interval. An ordinary annuity is an annuity which makes its payment at the end of each interval period. An ordinary annuity is also known as an annuity in arrears.

An annuity paid in a series of more or less equal payments at the end of equally spaced periods Words similar to ordinary annuity. The amount that a recurring equal amount deposited at the end of each period will grow to under compounded interest. Ordinary annuity means an annuity which is related to the period preceding its date whereas annuity due is the annuity related to the period following its date.

Most of the people use an annuity as a retirement tool pension that guarantees steady income in the coming years. A mortgage payment is an ordinary annuity because the payment is made after a. Investors can use formulas to calculate the present value or future value of an ordinary annuity by taking into account the time value of money.