• Kalpesh Agrawal

Annuity-Due and its formula

Let's understand Annuity-Due.

  • An Annuity-Due is an annuity for which the payments are made at the beginning of the payment periods.

  • The first payment is made at time 0, and the last payment is made at time n-1.

  • The present value of the annuity-due at time 0 by:

  • The future value of the annuity at time n by:

  • The formula for the Present and future value of an annuity due is as follows:

  • Each payment in an annuity due is paid one period ahead of the corresponding payment of an annuity-immediate. We can write the formula for Annuity due in Annuity Immediate terms as follows:

Written by: Kalpesh Agrawal (Jr. Actuarial Officer)

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