What is the difference between simple annuity and general annuity?
Subsequently, one may also ask, what is general annuity?
Definition: A general annuity is an annuity where the payment intervals are not the same as the interest intervals. Example 1: Monthly payments of $500 where interest is 6%/a, compounded monthly.
Furthermore, what is the example of simple annuity? The most common payment intervals are yearly (once a year), semi-annually (twice a year), quarterly (four times a year), and monthly (once a month). Some examples of annuities: Mortgages, Car payments, Rent, Pension fund payments, Insurance premiums.
Beside above, what is difference between ordinary annuity and annuity due?
Ordinary annuity refers to the sequence of steady cash flow, whose payment is to be made or received at the end of each period. Annuity due implies the stream of payments or receipts which fall due at the beginning of each period. As the payment made on annuity due, have a higher present value than the regular annuity.
Who should not buy an annuity?
Typically you should consider an annuity only after you have maxed out other tax-advantaged retirement investment vehicles, such as 401(k) plans and IRAs. If you have additional money to set aside for retirement, an annuity's tax-free growth may make sense - especially if you are in a high-income tax bracket today.