Question

What is the difference between ordinary annuity and annuity due? Give some example of annuities.

Answer 1

Answer:

Annuity due is an annuity whose payment is due immediately at the beginning of each period. Annuity due can be contrasted with an ordinary annuity where payments are made at the end of each period. A common example of an annuity due payment is rent paid at the beginning of each month.

Step-by-step explanation:

Examples of annuities are regular deposits to a savings account, monthly home mortgage payments, monthly insurance payments and pension payments.