List the five primary characteristics of an annuity and explain the difference between an ordinary annuity and an annuity due
What will be an ideal response?
Answer: Annuity problems can have five variables:
1. Present value
2. Future value
3. Interest rate per compounding period
4. Number of compounding periods
5. Amount of payments
An annuity is a series of equal payments. For an ordinary annuity, those payments occur at the end of each period; for an annuity due, those payments occur at the beginning of each period.
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