Annuities

2007An rente consists of a series of equal recompenses over a specified dot of epoch (Smith , Skousen , Stice Stice , 1998 . An rente is a plot of equal degreeic requitals made at equal term intervals for purposes of paying a loan or creating a reveal . Interest payments on bonds , premiums on indemnity , payments on initiation purchases , and payments of rent argon examples of rente . The payment intervals for the payment of annuity may be of any length , but the rigorous to commonly used atomic number 18 the annual , semi-annual , quarterly , and periodic payment intervalsSimple annuity is an annuity whose payment interval is the analogous as the interest period . There ar annuities that are fixed , meaning that the confines touch offs and ends on expressed realises . periodical payment on installment purchases are called annuity authorized since the payment starts on a definite date and await regularly until the last payment . There are triad types of simple annuity namely : ordinary annuity , annuity due , and deferred annuityOrdinary annuity is one whose periodic payments are compensable at the end of each payment interval . The offset printing payment in ordinary annuity is made at the end of the first period .

annuity due , on the another(prenominal) hand is an annuity whose payments are due at the root word of each payment period The first payment is due immediately at the beginning of the first period . Lastly , deferred annuity s first payment is deferred or postponed , an d is to start at some future dateContingent ! annuity is one whose term depends on some uncertain events galore(postnominal) life indemnity policies are examples of contingent annuity . The clams of life amends policies frequently fund annuities . Policy holders of insurance or companionable security may be compensable from the funds that were formal for their benefit on the deaths or other claims of other polity ownersReference Smith , J , Skousen , K .F , Stice , E Stice , J (1998 . Annuity Intermediate accounting (p 248 . South WesternPAGEPAGE 3ANNUITIES Page...If you fate to get a full essay, order it on our website: OrderEssay.net

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