Present Value Of Annuity

Annuities are regarded as fixed payments that are either received or paid in a specific period of time. These payments can be paid out in different ways including monthly, half-yearly or annually. These annuities are mainly calculated on the basis of future and present values so that convenient payments can be made on time. The current or present value of an annuity is stronger in comparison to the future value.
This is because the current values can be accurately determined while the future values are usually estimated on the basis of assumptions and that can be either accurate or fluctuating in nature. In both cases, there are three essential elements or factors that need to be considered and they are number of payments, interest rates and cash flow/period. The money value can be effectively ascertained from these two concepts and this is the reason that these two concepts are highly useful in the present age especially in making investments.
These values are of great value to the investors who mainly determines the current value while making investments when the bond prices are lower but while gainingĀ  returns on investments the future value of an annuity is ascertained in order to get the maximized returns. If you are willing to learn about the basic differences between these two monetary values, then you must take the time to learn thorough online research.
The calculative formulas of future and present annuities differ from one to another. In fact, the entire modern finance industry depend on these two concepts of annuity values.
Therefore, this payment system mainly depends greatly on the type of annuity. There are different products or services that utilize the same concepts of annuity payments like rent payment, insurance premium payment, investments and many more. There is a specific annuity calculator which is highly required for making accurate calculations of both future and present annuity-values. This kind of online based calculative software is now being used by almost all the commercial industries of the present age for calculating perfect annuity values as per requirement. You just need to put the necessary figures in and fill in the requisite fields and the actual annuity value will automatically calculated within few seconds so that you can gain accurate values of different types of annuities.