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11 GEN-MATH Q2 > ANNUITY > Flashcards

ANNUITY Flashcards

1
Q

A financial plan or deal
where regular payments
are made or received
over time such as
monthly or yearly.

A

ANNUITY

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2
Q

When the payments are
made at regular intervals,
like monthly or yearly,
and the interest (the extra
money you earn for
lending or saving) is
calculated at the same
frequency.

A

SIMPLE ANNUITIES

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3
Q

When the payments are
still regular, the interest is
calculated at a different
frequency. Maybe you
make monthly payments,
but the interest is
calculated yearly.0

A

GENERAL ANNUITIES

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4
Q

an annuity which
the payments are
made at the end
of payment
interval.

A

ORDINARY ANNUITIES

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5
Q

an annuity in which
the payments
extend over an
indefinite/
indeterminate
length of time

A

CONTINGENT ANNUITIES

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6
Q

an annuity in which the payments are made at beginning of each interval

A

ANNUITY DUE

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7
Q

an annuity in
which payments
begin and end at
definite times.

A

ANNUITY CERTAIN

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8
Q

THE FIXED AMOUNT OF MONEY PAID OR RECEIVED AT REGULAR INTERVALS

A

REGULAR OR PERIODIC PAYMENT (R)

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9
Q

THE TOTAL AMOUNT (SUM) OF ALL PAYMENTS MADE BY THE END OF THE ANNUITY PERIOD, INCLUDING INTEREST.

A

AMOUNT (FUTURE VALUE) OF AN ANNUITY (F)

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10
Q

SUM OF PRESENT VALUES OF ALL THE PAYMENTS TO BE MADE DURING THE ENTIRE TERM OF THE ANNUITY

A

PRESENT VALUE OF AN ANNUITY (P)

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11
Q

DISCOUNT RATE (IN DECIMAL)

A

ANNUAL INTEREST RATE (I)

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12
Q

a sum of money that is paid in regular equal payments

A

ANNUITY

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13
Q

Example:

Installment payments, monthly rentals, and life insurance premiums

A

ANNUITY

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14
Q

the period of time between consecutive payments

A

Payment Interval

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15
Q

Example:

God buys a new smartphone and agrees to pay it via installment. He will pay ₱1 500 every month for 2 years. In this case, the payment interval of the annuity is monthly.

A

Payment Interval

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16
Q

the time from the beginning of the first payment interval to the end of the last payment interval

A

Term

17
Q

Example:

God buys a new smartphone and agrees to pay it via installment. He will pay ₱1 500 every month for 2 years. In this case, the term of the annuity is 2 years.

A

Term

18
Q

It is an annuity payable for a definite duration. It means that this annuity begins and ends on a definite date.

A

Annuity Certain

19
Q

Example:

Celongka buys a new laptop and agrees to pay through installment. She will pay ₱2 500 every month for 2 years.

A

Annuity Certain

20
Q

It is an annuity payable over a term that has a definite start date but no definite end date.

A

Perpetuity

21
Q

Example:

Payment of housing rent

A

Perpetuity

22
Q

It is an annuity payable for an indefinite duration. It means that the beginning or the termination is dependent on some certain event.

A

Contingent Annuity

23
Q

Example:

Insurance and pension payments

A

Contingent Annuity

24
Q

It is an annuity certain whose compounding period is the same as the payment interval.

A

Simple Annuity

25
Q

Example:

Leonard buys a brand-new TV with installment payment at the end of each month with interest compounded monthly.

A

Simple Annuity

26
Q

It is an annuity certain whose compounding period is not the same as the payment interval.

A

General Annuity

27
Q

Example:

Vijayjay buys a brand-new TV with installment payment at the end of each quarter with interest compounded annually.

A

General Annuity

28
Q

It is an annuity in which the periodic payment is made at the end of each payment interval.

A

Ordinary Annuity

29
Q

Example:

Sam buys a washing machine with installment payment at the end of every month for one year.

A

Ordinary Annuity

30
Q

It is an annuity in which the periodic payment is made at the beginning of each payment interval.

A

Annuity Due

31
Q

Example:

Gilly buys a washing machine with installment payment at the beginning of every month for one year.

A

Annuity Due

32
Q

It is the total of the payments and interest earned at the end of the term.

A

Future Value of an Ordinary Annuity

33
Q

It is the principal that must be invested today to provide the regular payments for the annuity.

A

Present Value of an Ordinary Annuity

34
Q
A

11 GEN-MATH Q2 (3 decks)

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