What is an annuity-SolutionAnnuity is a series of the same payments re.docx

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An annuity is a contract between an individual and an insurance company where the individual makes a lump sum payment or series of payments and in return receives periodic payments from the insurer starting immediately or at a future date. There are two main types of annuities - regular/ordinary annuities and annuities due - and their future and present values are calculated to help with financial planning and decision making.

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What is an annuity?
Solution
Annuity is a series of the same payments recevied over a period of time .
According to SEC ,
An annuity is a contract between you and an insurance company that is designed to meet
retirement and other long-range goals, under which you make a lump-sum payment or series
of payments. In return, the insurer agrees to make periodic payments to you beginning
immediately or at some future date.
There can be different payment intervals say a year , month , six month etc.
Annuities are bascially of two types
1) Annuity regular/ordinary
2) Annuity Due
The future value and present value of annuity is determined time to time to make financial
decisions.

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