# What is Annuity: Definition and 52 Discussions

An annuity is a series of payments made at equal intervals. Examples of annuities are regular deposits to a savings account, monthly home mortgage payments, monthly insurance payments and pension payments. Annuities can be classified by the frequency of payment dates. The payments (deposits) may be made weekly, monthly, quarterly, yearly, or at any other regular interval of time. Annuities may be calculated by mathematical functions known as "annuity functions".
An annuity which provides for payments for the remainder of a person's lifetime is a life annuity.

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1. ### Given price of an annuity and its level payments, find the interest rate

A 30-year monthly-payment mortgage loan for 300,000 is offered at a nominal rate of 0.072 converted monthly. Thus the monthly effective interest rate is 0.006 and the calculated monthly payment is 2036.36. (Calculate the payment (PMT) on your calculator and leave it there for the moment.) When...
3. ### MHB Applying the annuity method - how?

Hello, I was given following task: A food processing company has to make a decision whether or not to expand its production facilities. A feasibility study showed the following estimates: Initial cost outlay €800,000 Further outlay in 4 years €600,000 Residual value after 10 years €200,000...

Mr. Budi borrows 2,000,000IDR which will be amortized with 10 annuities. The first annuity will be paid in 1 year with 10% per year interest. Make the installment plan! For the annuity I got A = M\times\frac1{\sum_{n=1}^p(1+i)^{-n}} = 2,000,000\times\frac1{\sum_{n=1}^{10}(1+0,1)^{-n}} =...

8. ### MHB Present value of a perpetual annuity

Hey! :o I want to determine the present value of a perpetual annuity, which will incur an interest payment of € 1 at the end of each year. A calculative interest rate $r$ is assumed. We are at the time $t = 0$, the first payout is in $t = 1$. Could you explain to me what an interest...
9. ### MHB Geometric annual annuity

The geometric annual annuity runs for a period of 45 years which starts now. • The first payment at the end of the first year from now amounts to R2 000. • The growth rate of the annual payments equals 7% per year during the first 30 years (of the period of 45 years). • The growth rate of the...
10. ### Formula for annuity payments

So, unless you've been living under a rock, you should know the jackpot for the powerball is at 1.5 billion dollars. I was looking up the distribution of annuity payments and the website said that the payments are not equally distributed. They are incremented by 5% each year. Like the nerd I...

14. ### Annuity word problem

Homework Statement A business is paying off a debt by paying an installment of $8000 at the end of each year. Interest is being charged at 5.5%. What is the outstanding debt if the business has just paid an installment and there remain 15 further installments of$8000 and a final repayment of...
15. ### Courses suggestions for a finance-wannabe?

Hello all, I am an applied math/physics major who wishes to land on a finance-related jobs (including insurance) with a bachelor's degree. The coursework includes ODEs, PDEs, Calculus of Variations, Numerical Analysis, etc., with three faculty elective courses. Here is a list of courses that I...

Hi guys I am trying to come up with an equation to solve for a break even point. Basically I have an initial outlay of cash with then a trail of income in the subsequent months. I need to know how often per year I need to receive this trail of income in order for the future discounted cash flows...
17. ### Compound investment - annuity

Homework Statement Question is attached. Homework Equations sn = [a(1-r^n)]/(1-r) The Attempt at a Solution I know the more compounding periods there are, the better. The part that I'm stuck on is what values to put for r and n, since the rate that he is making payments is...
18. ### Annuity investment, find future value

Homework Statement (attached) Homework Equations Sn = (a(1-r^n))/(1-r) The Attempt at a Solution This was my attempt, but I think I've done this wrong. I'm not really sure how to account for the fact that the payments are made at the end of the year. Unless that means I would act...
19. ### Schaum's Outline of Mathematical Handbook of Formulas and Tables

Author: Seymour Lipschutz, Murray Spiegel, John Liu Title: Schaum's Outline of Mathematical Handbook of Formulas and Tables Amazon Link: https://www.amazon.com/dp/0071795375/?tag=pfamazon01-20 Prerequisities: None Table of Contents: Formulas Elementary Constants, Products, Formulas...
20. ### Probability: The Science of Uncertainty by Michael A. Bean

I'm looking for a good and pedagogic book about introductory Probability and statistics. I'm trying to get into this subject by self study. I only have knowledge in basic calculus, a little about multivariable calculus and linear algebra. I studying physics but I don't how much I'll be needing...

http://thewitlessinvestor.wordpress.com/2012/03/27/you-won-the-lottery-lump-sum-or-annuity/ "If I invested my lump sum of $259 million today, and earned on average 10% from my investment, then is 26 years,... I will have around$3 Billion." Besides a grammar error: "then >is = IN< 26...
22. ### Finance formulas to compare the best value of a house

Homework Statement House one is going for say 350.000 and House two is going for 250.000, both have the same bed and bath. Yet i want to add variables for instance house one has a decline in crime rate variable also a newly build mall. House two has new schools and crime is on the rise. So my...
23. ### Future Value of an annuity

Homework Statement Mike needs $12.000 in 5 years. How much must he deposit at the end of each month for 5 years in an account paying 2.9% compounded monthly so that he will have$12.000 in 5 years? Homework Equations FV formula: S=R*((1+i)^n -1)/i I think that is the correct...

26. ### At what point does math begin to describe the world in depth?

I am taking Finite mathematics we learn things such as annuities and interest rates as well as matrices. Anyways i have taking math my entire life. And i do see the physical parts with things such as 1+1=2 but not in say y=5x+6 graphed out, or with isolating variables with functions like...

~TLDR at the bottom~ Homework Statement The Big question: Variables Account 1: P=250 R=.005 N=12 T=46 Variables Account 2: A1=155123.83 R=.0025 N=12 T=15 Homework Equations Annuity Formula(Given): A=P[(1+(r/n))nt)-1] ______________ (r/n)...

49. ### Annuities: Determining the Interest Rate

Annuities: Determining the Interest Rate (help needed!) David has $2000 to invest in an annuity. What interest rate must be obtain in order to receive payments of$500 at the end of each year for the next 5 years?
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### News How Galveston, TX opted out of Social Security

How Galveston, TX opted out of Social Security... http://www.tppf.org/government/perspect/holbrook.html [Broken] :smile: