This part deals with the future value of an annuity. An annuity is an equal periodic amount. That is, to qualify as an annuity, the amount of each payment or deposit must be the came (equal), and the time period between each payment or deposit must be the same (equal). As in the other parts, this will focus on solutions utilizing Time Value of Money Tables, specifically the Future Value of an Annuity table. It will distinguish between ordinary annuity (payments or deposits occur at the end of the period) and annuity due (payments or deposits occur at the beginning of the period). Another way of looking at future value of an ordinary annuity is to realize that the future value amount is determined immediately after the last deposit. In an annuity due, the future value is determined one period after the last deposit. Examples are offered to illustrate the concepts related to Future Value of an Annuity.
For a PDF handout of the presentation, click here.