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How do an ordinary annuity, an annuity due, and a perpetuity differ.pdf

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How do an ordinary annuity, an annuity due, and a perpetuity differ? Explain. Solution Annuity refers to series of periodic cash flow made or received at equal intervals. Cash flows can be either inflows or outlfows happening after a periodic time intervals like weekly, monthly, quarterly or annually. Ordinary Annuity - When payment or receipt happens at the end of a time period. Annuity Due - When payment or receipt happens at the beginning of a time period. Perpetuity - An Annuity in which there is no end date i.e. an annuity which is everlasting..

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How do an ordinary annuity, an annuity due, and a perpetuity differ? Explain. Solution Annuity refers to series of periodic cash flow made or received at equal intervals. Cash flows can be either inflows or outlfows happening after a periodic time intervals like weekly, monthly, quarterly or annually. Ordinary Annuity - When payment or receipt happens at the end of a time period. Annuity Due - When payment or receipt happens at the beginning of a time period. Perpetuity - An Annuity in which there is no end date i.e. an annuity which is everlasting.

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