Question

Define an annuity and discuss why an annuity is so important when buying a car, buying a home or in a retirement plan, especially in the life of people that are not economically wealthy?

Answer 1

Annuity is a fixed sum of money paid every year. Its named as annuity from annually paid.

it is important to calculate annuity to make future financial plans such as to buy car , home or saving for retirement. People who are not economically healthy cannot pay for these out of their pockets easily. They would like to pay smaller amounts over the coming future. Saving for retirement is also done with some amount each year so that they have a good life post retirement.