Chapter Summaries
6.1 Distinguish between an ordinary annuity and an annuity due, and calculate the present and future values of each. (pgs. 160–173)
Summary:
An annuity is a series of equal dollar payments, where the periods between the payments are of equal length, such as monthly or annually. An ordinary annuity involves cash payments made at the end of each period, whereas an annuity due involves payments made at the beginning of each period. Appendices B through E in MyFinanceLab contain tables with future value interest factors, present value interest factors, annuity future value interest factors, and annuity present value interest factors for various combinations of i and n.
Key Terms
- Amortized loan, page 168
A loan that is paid ...
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