What is an annuity due

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Ordinary Annuity

An ordinary annuity calls for payment at the end of each interval. If the annuity calls for three payments over three years, the first payment comes due at the end of the first year. The last payment, which closes the annuity, occurs at the end of the third year. Ordinary annuities accrue less value over time. As no money changes hands until the end of the first interval, less money earns interest over the life of the annuity.



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Source: ehow.com

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