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Topic: Miscellaneous
Number of pages / Number of words: 7 / 1693
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The Future Value of an Annuity Due is identical to an ordinary annuity except that each payment occurs at the beginning of a period rather than at the end. Since each payment occurs one period earlier, we can calculate the present value of an ordinary annuity and then multiply the result by (1 + i) (Get Objects, 2002, par...


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1).

"During the present value of annuity the process is reversed. In theory each individual payment is discounted back to the present and then all of the discounted payments are added up, yielding the present value of the annuity. Present value of annuity can also be thought of as the amount you must invest today at a specific interest rate so that when you withdraw an equal amount each period, the original principal and all accumulated interest will be completely exhausted at the end of the annuity...


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