Annuity Types and Financial Mathematics Terminology

Vocabulary flashcards covering the definitions of various annuity classifications and key financial mathematics terminology.

Ordinary Annuity

Payments are made at the end of each payment period.

Annuity Due

Payments are made at the beginning of each payment period.

Simple Annuity

Payment frequency equals compounding frequency.

General Annuity

Payment frequency is different from compounding frequency.

Deferred Annuity

Payments begin after a waiting period.

Immediate Annuity

Payments begin at the end of the first payment period.

Perpetuity

An annuity that makes payments forever.

Annuity Certain

Payments continue for a specific, predetermined period.

Contingent Annuity

Payments depend on an uncertain event, such as someone remaining alive.

PMT

Amount of each regular payment.

PV

Present value; value of money today.

FV

Future value; value of money at a future date.

I/Y

Annual interest rate.

C/Y

Number of compounding periods per year.

P/Y

Number of payments per year.

N

Total number of payments or periods.

Interest

Cost of borrowing money or earnings on savings.

Principal

Original amount borrowed or invested.