<div style="margin: 12px 0px; font-family: arial; color: #333333; background: #ffffff; border: solid 4px #e5e5e5; width: 100%; clear: left;"><div class="CM_CTB_Content_Wrap" style="margin: 0px; padding: 0px;background-color: #ffffff;"><div style="border-bottom: solid 1px #dcdcdc; white-space: nowrap; margin-bottom: 8px; background-color: #eeeeee ;background-image: url(http://www.clipmarks.com/images/source-bg.gif); background-repeat: repeat-x; height: 24px; line-height: 24px; vertical-align: middle; padding-bottom: 4px; color: #666666; font-size: 10px;" ><a href="http://clipmarks.com/clip-to-blog/" title="see clips that are hot right now"><img src="http://content.clipmarks.com/blog_embed/1d323458-492b-4628-bcba-0f13aa48bbc1/C178519D-A22D-4556-9E8B-547ECC962A32/" alt="" width="19" height="19" border="0" style="vertical-align: middle; margin: 0px 4px; display: inline; border: none; float:none;" /></a>clipped from <a title="http://www.answers.com/topic/annuity-finance-theory" href="http://www.answers.com/topic/annuity-finance-theory" style="font-size: 11px;">www.answers.com</a></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://www.answers.com/topic/annuity-finance-theory"><H1>Annuity</H1></blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://www.answers.com/topic/annuity-finance-theory"><SPAN class="mw-headline">Ordinary annuity</SPAN></blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://www.answers.com/topic/annuity-finance-theory"><P>An <B>ordinary annuity</B> (also referred as <B>annuity-immediate</B>) is an annuity whose payments are made at the end of each period (e.g. a month, a year). The values of an ordinary annuity can be calculated through the following<SUP class="reference" id="cite_ref-1"><A title="" href="#cite_note-1"><SPAN>[</SPAN>2<SPAN>]</SPAN></A></SUP>:</P></blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://www.answers.com/topic/annuity-finance-theory"><DD><SPAN class="texhtml"><I>P</I></SPAN> = the principal (or present value).</DD></blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://www.answers.com/topic/annuity-finance-theory"><DD><SPAN class="texhtml"><I>S</I></SPAN> = the future value of an annuity.</DD></blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://www.answers.com/topic/annuity-finance-theory"><DD><SPAN class="texhtml"><I>R</I></SPAN> = the periodic payment in an annuity (the amortized payment).</DD></blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://www.answers.com/topic/annuity-finance-theory"><div align="center"><img src="http://content8.clipmarks.com/blog_cache/www.answers.com/img/DD7ED8F8-49DF-4E46-92FB-1014B5EC2240" alt="S \,=\,R\left[\frac{\left(1+i\right)^n-1}{i}\right] \,=\,R\cdot s_{\overline{n}|i}" /></div></blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://www.answers.com/topic/annuity-finance-theory"><P>Also:</P></blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://www.answers.com/topic/annuity-finance-theory"><div align="center"><img src="http://content9.clipmarks.com/blog_cache/www.answers.com/img/FAD1C72C-C9FC-476D-AAAF-6F35F9CE15AE" alt="P \,=\,R\left[\frac{1-\frac{1}{\left(1+i\right)^n}}{i}\right] = R\cdot a_{\overline{n}|i}" /></div></blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://www.answers.com/topic/annuity-finance-theory"><SPAN class="mw-headline">Annuity-due</SPAN></blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://www.answers.com/topic/annuity-finance-theory"><P>An <B>annuity-due</B> is an annuity whose payments are made at the beginning of each period.<SUP class="reference" id="cite_ref-2"><A title="" href="#cite_note-2"><SPAN>[</SPAN>3<SPAN>]</SPAN></A></SUP> Deposits in savings, rent payments, and insurance premiums are examples of annuities due.</P></blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://www.answers.com/topic/annuity-finance-theory"><div align="center"><img src="http://content6.clipmarks.com/blog_cache/www.answers.com/img/2FAEA749-56FB-4496-A301-FFF58B8C349E" alt=" S \, = \, R \left[ { (1+i)^{n+1} - 1 \over i } \right] - R\,=\,R\cdot \ddot{s}_{\overline{n|}i}" /></div></blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://www.answers.com/topic/annuity-finance-theory"><DD><IMG src="http://wpcontent.answers.com/math/9/c/8/9c893b3c0cad9394697c8905e766504c.png" alt="S \,=\,R\left[\frac{\left(1+i\right)^n-1}{i}\right](1 + i ) \,=\,R\cdot s_{\overline{n}|r}" class="tex" /><SPAN class="texhtml">(1 + <I>i</I>)</SPAN></DD></blockquote></div><div style="margin: 0px 6px 6px 4px;"><table style="font-size: 11px;border-spacing: 0px;padding: 0px;" cellpadding="0" cellspacing="0" width="100%"><tr><td style="background:transparent;border-width:0px;padding:0px;">&nbsp;</td><td align="right" style="background:transparent;border-width:0px;padding:0px;width:107px" width="107"><a href="http://clipmarks.com/share/C178519D-A22D-4556-9E8B-547ECC962A32/blog/" title="blog or email this clip"><img src="http://content8.clipmarks.com/images/c2b-foot.png" border="0" alt="blog it" width="107" height="17" style="border-width:0px;padding:0px;margin:0px;" /></a></td></tr></table></div></div>

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