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Write a summary explaining future value and present value of an annuity and include examples for...

Write a summary explaining future value and present value of an annuity and include examples for both for finance. Sum everything up in a minimum of 150 words. Give the summary a title and include a full link of where to find helpful information related to the topic.

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Annuity is defined as series of similar cash flow for specified limited period. There are two types of annuity, Ordinary annuity and annuity due. In the ordinary annuity payment is made at the end of the period and in the annuity due payment is made at the beginning of the year.

Present value of annuity is the present value of all future cash flow for each period for limited period. Example of present value of annuity is mortgage loan, in which loan amount is present value of annuity for future periodic payment over life of loan (usually 30 year).

Future value of annuity is the future value (at end of period) of all future periodic cash flow for limited period. Example of future value of annuity is saving for retirement in which total accumulated value at time of retirement is the future value of annual saving you made for retirement

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