Annuities: Ordinary? Due? What do I do?

Annuities

Ordinary? Due? What do I do?

During World War II, air defense forces were trained to recognize airplanes by their silhouette. In the dark night skies, you needed to quickly discern friend from foe, and take appropriate actions. Today in studying finance, you need to be able to quickly tell an ordinary annuity from an annuity due, and then take the appropriate steps to calculate the annuity's future or present value.

The purpose of this tutorial is to help you better identify, understand, and calculate future and present values of both ordinary annuities and annuities due. The tutorial assumes that you have a basic understanding of the time value of money, but might still need a little extra help with annuities.
For those needing a more basic understanding of the time-value-of-money principles, check out one or more of the following links before going on to pages two and three:

Anything but Ordinary: Calculating the Present and Future Value of Annuities. Nice article courtesy of Investopedia.com.
http://www.investopedia.com/articles/03/101503.asp
PowerPoint Slides: Time Value of Money. Tutorial on time value of money topics based on Chapter 3 in Fundamentals of Financial Management, 113/e, by Van Horne and Wachowicz.
https://media.pearsoncmg.com/intl/wps-wraps/ema_uk_he_wachowicz_fundfinman_13/cw/downloads/VW13E-03.pptx
Understanding the Time Value of Money. Brush up on time value of money concepts with this article courtesy of Investopedia.com.
http://www.investopedia.com/articles/03/082703.asp

Page One | Page Two | Page Three

Note: Legal disclaimer can be found at the bottom of this page.

(Revised 12/29/23)

Comments to John Wachowicz

Visit Wachowicz's Web World: Web Sites for Discerning Finance Students

Visit True/False Quizzes for Fundamentals of Financial Management

Visit Multiple-Choice Quizzes for Fundamentals of Financial Management

Visit the Companion Website for 13/e for Chapter Objectives, PowerPoint slides, Excel Templates, additional interactive Quizzes , and more.

"ANNUITIES: ORDINARY? DUE? WHAT DO I DO?" WEB SITE: LEGAL DISCLAIMER

JOHN WACHOWICZ MAKES NO WARRANTIES WITH RESPECT TO THIS WEB SITE OR ITS CONTENT, WHICH ARE PROVIDED FOR USE "AS IS." JOHN WACHOWICZ DISCLAIMS ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, WITH RESPECT TO THE WEB SITE AND ANY WEB SITE WITH WHICH IT IS LINKED. JOHN WACHOWICZ ALSO MAKES NO REPRESENTATIONS OR WARRANTIES AS TO WHETHER THE INFORMATION ACCESSIBLE VIA THIS WEB SITE, OR ANY WEB SITE WITH WHICH IT IS LINKED, IS ACCURATE, COMPLETE, OR CURRENT.

In no event shall John Wachowicz, his employers, or his agents be liable for any damages of any kind or character, including without limitation any compensatory, incidental, direct, indirect, special, punitive, or consequential damages, loss of use, loss of data, loss of income or profit, loss or damage to property, claims of third parties, or other losses of any kind or character, even if John Wachowicz has been advised of the possibility of such damages or losses, arising out of or in connection with the use of this Web Site or any Web Site with which it is linked.