Question

Explain the differences between perpetuities and annuities. What common types of perpetuities and annuities do people...

Explain the differences between perpetuities and annuities. What common types of perpetuities and annuities do people invest in?

Homework Answers

Answer #1

1. Perpetuity payout fixed payment throughout the life of the investment (infinite life) where as annuities pay out for a fixed period of time.
2. Pepetuity don't have any type where as annuities have annuity(paid after the month or year)   and annuity due ( paid before the month or year)

Examples of Perpetuity is Consol . Bond Issued by UK .
EMI , Coupon of Bonds and rent are all annuities.

Please Discuss in case of Doubt

Best of Luck. God Bless
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