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Overview
CAEC Math
Number Sense
5. Financial Mathematics: Solving Problems with Fractions, Decimals, and Percentages
5.14 Ordinary annuity
Ordinary Annuity
Understand ordinary annuities, learn the present value and future value formulas, and practice solving annuity problems step by step.
What You'll Learn
Recognize that an ordinary annuity pays or deposits the same fixed amount at the end of every period
Apply the future value formula \( FV = PMT \cdot \dfrac{(1+i)^n - 1}{i} \) to find total savings
Apply the present value formula \( PV = PMT \cdot \dfrac{1 - (1+i)^{-n}}{i} \) to find today's value
Compare ordinary annuities to annuity due, where payments happen at the start of each period
Calculate the periodic interest rate \( i \) and number of periods \( n \) before using a formula
Identify real-life examples such as loan payments, mortgage payments, and regular savings deposits
This Unit Includes
Learning resources
TEST-PREP Curriculum Aligned