General Mathematics

Simple Annuity
 Review
Future Value

where:
F - Future Value
R – periodic/regular payment
j - interest rate per period
n – number of payments/conversion periods;

General Annuity
where:
j - annual rate
m - number of conversion period in a year
n - total number of conversion periods
n = m(t)
t - number of years
 Review
Present Value

where:
F - Future Value
R – periodic/regular payment
j - interest rate per period
n – number of payments/conversion periods;

where:
j - annual rate
m - number of conversion period in a year
n - total number of conversion periods
n = m(t)
t - number of years
 Example
In order to save for her high
school graduation, Marie decide to
save ₱200.00 at the end of each
month. If the bank pays 0.250%
compounded monthly, how much
will her money be at the end of 6
years.
 Example
Mr. Cabiles paid ₱200,000.00 as
down payment of the car. The
remaining amount is to be settled
by paying ₱16, 200.00 at the end
of each month for 5 years. If
interest is 10.5% compounded
monthly, what is the cash price of
his car?
 General Mathematics

General Annuity
 Annuity
Simple Annuity
An annuity where the payment intervals
is the same as the interest period
General Annuity
An annuity where the payment intervals
is not the same as the interest period
 Let’s Try it!

₱1,500 deposited every month for 15

years at 10% per year compounded
annually

Simple Annuity General Annuity

 Let’s Try it!

₱1,500 deposited every month for 15

years at 10% per year compounded
annually

General Annuity
 Let’s Try it!

₱1,500 deposited every month for 15

years at 10% per year compounded
monthly

Simple Annuity General Annuity

 Let’s Try it!

₱1,500 deposited every month for 15

years at 10% per year compounded
monthly

Simple Annuity
 Let’s Try it!

₱ 5,000 deposited every six months for

5 years at 8% per year compounded
semi-annually

Simple Annuity General Annuity

 Let’s Try it!

₱ 5,000 deposited every six months for

5 years at 8% per year compounded
semi-annually

Simple Annuity
 Let’s Try it!

₱ 5,000 deposited every month for 5

years at 8% per year compounded
annually

Simple Annuity General Annuity

 Let’s Try it!

₱ 5,000 deposited every month for 5

years at 8% per year compounded
annually

General Annuity
 Let’s Try it!
Which of the following is NOT an
example of annuities?
a. pension c. car loan

b. educational plan d. deposit

 Let’s Try it!
Which of the following is NOT an
example of annuities?

d. deposit
 Annuities

According to
payment
interval and
interest
period

According to
time of
payment

According to
duration
 Annuities

According to Simple Annuity - an

payment annuity where the
interval and payment intervals is the
interest same as the interest
period period

According to
time of
payment

According to
duration
 Annuities

According to Simple Annuity - an General Annuity - an

payment annuity where the annuity where the
interval and payment intervals is the payment intervals is not
interest same as the interest the same as the interest
period period period

According to
time of
payment

According to
duration
 Annuities

According to Simple Annuity - an General Annuity - an

payment annuity where the annuity where the
interval and payment intervals is the payment intervals is not
interest same as the interest the same as the interest
period period period

Ordinary Annuity (or

Annuity Immediate) - a
According to
type of annuity in which
time of
the payments are made at
payment
the end of each payment
interval

According to
duration
 Annuities

According to Simple Annuity - an General Annuity - an

payment annuity where the annuity where the
interval and payment intervals is the payment intervals is not
interest same as the interest the same as the interest
period period period

Ordinary Annuity (or Contingent Annuity -

Annuity Immediate) - a an annuity in which the
According to
type of annuity in which payments extend over
time of
the payments are made at an indefinite (or
payment
the end of each payment indeterminate) length of
interval time

According to
duration
 Annuities

According to Simple Annuity - an General Annuity - an

payment annuity where the annuity where the
interval and payment intervals is the payment intervals is not
interest same as the interest the same as the interest
period period period

Ordinary Annuity (or Contingent Annuity -

Annuity Immediate) - a an annuity in which the
According to
type of annuity in which payments extend over
time of
the payments are made at an indefinite (or
payment
the end of each payment indeterminate) length of
interval time

Annuity Certain - an
According to annuity in which
duration payments begin and end
at definite times
 Annuities

According to Simple Annuity - an General Annuity - an

payment annuity where the annuity where the
interval and payment intervals is the payment intervals is not
interest same as the interest the same as the interest
period period period

Ordinary Annuity (or Contingent Annuity -

Annuity Immediate) - a an annuity in which the
According to
type of annuity in which payments extend over
time of
the payments are made at an indefinite (or
payment
the end of each payment indeterminate) length of
interval time

Contingent Annuity -
Annuity Certain - an an annuity in which the
According to annuity in which payments extend over
duration payments begin and end an indefinite (or
at definite times indeterminate) length of
time
 DEFINITON OF TERMS
Term of annuity, t - time between the first
payment interval and last payment interval
 DEFINITON OF TERMS
Term of annuity, t - time between the first
payment interval and last payment interval
Regular or Periodic Payment, (R) – the
amount of each payment in an annuity
 DEFINITON OF TERMS
Term of annuity, t - time between the first
payment interval and last payment interval
Regular or Periodic Payment, (R) – the
amount of each payment in an annuity
Future value or the amount of an
annuity (F)– sum of the future values of
all the payments to be made during the
entire term of the annuity
 DEFINITON OF TERMS
Term of annuity, t - time between the first
payment interval and last payment interval
Regular or Periodic Payment, (R) – the
amount of each payment in an annuity
Future value or the amount of an
annuity (F)– sum of the future values of
all the payments to be made during the
entire term of the annuity
Present value of n annuity - sum of the
present values of all payments to be made
during the entire term of the annuity
 Illustration of Annuities
● Annuities may be illustrated using a time
diagram. The time diagram for an ordinary
annuity is given below.
 Example
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