People who make or receive a series of fixed payments over a period of time have what are called “annuities.” This article explains how the present and future values of annuities are calculated. “There are two basic types of annuities: ordinary annuities and annuities due.” The difference between these two types of annuities deal with when payments are required to be made. This article explains how to calculate the present and future value of an ordinary annuity. It also instructs readers in detail on calculating the present and future values of an annuity due. “Remember that the payment frequencies, or number of payments, and the time at which these payments are made (whether at the beginning or end of each payment period) are all variables you need to account for in your calculations.”
See Shauna Carther, Calculating The Present And Future Value Of Annuities, Investopedia, May 4, 2016.
