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Does annual compounding pay more money than daily compounding?
It all depends with the amount of the annual or daily compounding. In most cases it is however the daily compounding that pays more than the annual compounding.
Would an annuity value calculator show you the present value of an annuity?
Yes, an annuity value calculator can show you the present value of an annuity. As you may know, the present value of an annuity is the current value of a set of cash flows in the future, based on a specified rate of return.
Will you earn a higher interest rate with a variable annuity than with a fixed annuity?
Yes, you do earn a higher interest rate with a variable annuity than with a fixed annuity. It depends on what kind of interest rate you have at the moment.
What happens to the present value of an annuity if the future value of an annuity is increased?
It increases
How does the future value of a deposit subject to continuous compounding compare to the value obtained by annual compounding?
The future value of a deposit with continuous compounding is generally higher than that obtained through annual compounding, given the same interest rate and time frame. This is because continuous compounding calculates interest at every possible moment, effectively maximizing the amount of interest accrued over time. The formula for continuous compounding, ( FV = Pe^{rt} ), allows for exponential growth, while annual compounding relies on discrete intervals, resulting in less frequent interest calculations. Thus, for the same principal, interest rate, and duration, continuous compounding yields a greater future value.
When does interest begins compounding in an ordinary annuity?
At the end of the second period
What do you call an annuity where the payment interval is not the same as the interest compounding period?
An annuity where the payment interval differs from the interest compounding period is called a "variable annuity" or more specifically, it can be referred to as an "annuity with unequal payment periods." In this type of annuity, the payments may be made annually, semi-annually, or quarterly, while the interest may be compounded at a different frequency. This discrepancy can affect the total return and the effective interest rate of the annuity.
When there is only one compounding period in a ordinary annuity the table factor for future value is always 1?
True
What is a deferred annuity?
An annuity that will not begin until some time period in the future.A deferred annuity is an annuity in which the taxes due on any taxable portion is deferred until you start to withdraw from the annuity. It is a way of compounding interest on the money you would normally paid taxes on if not in a ta deferred annuity. In a way it is like using the government's money to make you money.
What is the interest rate of the annuity formula and how is it calculated?
The interest rate in the annuity formula represents the rate at which your money grows over time. It is calculated by dividing the annual payment by the present value of the annuity, and then adjusting for the number of compounding periods per year.
Does annual compounding pay more money than daily compounding?
It all depends with the amount of the annual or daily compounding. In most cases it is however the daily compounding that pays more than the annual compounding.
Do you pay taxes on income earned in an annuity?
If the annuity is a non qualified tax deferred annuity (an annuity that taxes were paid on the money before they were placed into the annuity) you will pay taxes on any interest growth when it is removed from the annuity. If the annuity is a qualified annuity (no taxes were paid prior to placing the fund into the annuity) you will pay taxes on all withdrawals from the annuity.
What is the primary difference between an annuity and a compound annuity?
difference between an annuity and a compound annuity?Read more: What_is_the_primary_difference_between_an_annuity_and_a_compound_annuity
What gains more interest an ordinary annuity or an annuity due?
ordinary annuity
What is monthly annuity?
The option to get annuity every month is called monthly annuity.
What are the different types of compounding in a pharmacy?
In pharmacy, compounding typically falls into three main types: sterile compounding, non-sterile compounding, and radioactive compounding. Sterile compounding involves preparing medications that must be free of microorganisms, often for injection or intravenous use. Non-sterile compounding includes the preparation of medications that do not require a sterile environment, such as creams, ointments, and oral solutions. Radioactive compounding involves the preparation of radioactive materials for diagnostic or therapeutic use in medicine.
What The difference between ordinary annuity and annuity due?
ordinary annuity we paid at the end of the period annuity due we paid at the begging of the period
