Saturday, February 2, 2013

Several Things You Should Know About Annuity Tables

By John James

Every investment has its own risks. That is why many investors usually want to know what they stand to gain by investing in a certain company when they reach the point of retirement. The best way to do this is to use annuity tables.

The interest rates and the term are used while doing that. Together, one can deduce the factor. So as to avoid making wrong financial decisions, it is advisable that you refer to the correct table.

There are several types of these tables. One of them is the present value of annuities table. It gives the factor that is used to find out the amount that a set of payments in the future are worth today. This is important especially if the deposits are to be made at the end of the period.

Then there is the present value due table. The factors it has allow you to find out the current worth of payments that are made in the future. Unlike in the previous case, the deposits are made at the beginning of your term.

A future value table is also commonly used. It provides the factor which is utilized, when an investor wants to know the value of his returns, after a group of payments in the future, if he or she deposits or makes payment. This factor is used in cases where the disbursements are made at the end of the term.

The other type of annuity tables is the future value of annuities due table. It indicates the factor that will be used when investors want to find out how much the deposit they have made will be worth after they make a number of payments in the near future. That is if the deposits are made at the beginning of the transaction period.

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