Simple Annuity

Question 1

These are sequences of fixed payments made at equal intervals or periods of time subject to fixed compound interest rat. This also uses compound interest.

Answer 1

Annuity

Question 2

Differentiate Annuity with Compound Interest

Answer 2

Annuity
- series of payments
- regular intervals or periods of time
- fixed

Compound interest
- maturity value
- involves only one payment
- grows

Question 3

What are the two types of annuity?

Answer 3

Certain & Uncertain

Question 4

This type of annuity is payable for a definite duration

Answer 4

Certain

Question 5

This type of annuity is payable for an indefinite duration

Answer 5

Uncertain

Question 6

What are the two kinds of annuity?

Answer 6

Simple & General

Question 7

In this kind of annuity, conversion period is equal/same as payment interval (n must match with the payment intervals)

Answer 7

Simple Annuity

Question 8

In this kind of annuity, conversion period is not the same as payment interval

Answer 8

General Annuity

Question 9

What are the different classifications of annuity?

Answer 9

Ordinary Annuity & Annuity Due

Question 10

This classification of annuity pertains to the payment made at the end [of the payment interval]

Answer 10

Ordinary Annuity

Question 11

This classification of annuity pertains to the payment made at the start [of the payment interval]

Answer 11

Annuity Due

Question 12

This term is also known as the Maturity value and is the total accumulation of payments and interest earned

Answer 12

Future Value