LESSON OBJECTIVES:

1. Distinguish between
simple and general
annuities.
2. Find the future value of
simple annuities.
Definition of Terms:
 Annuity – a sequence of
payments made at equal (fixed)
intervals or periods of time.
 Payment Interval – the time
between successive payments.
 Term of an annuity, t – time
between the first payment
interval and last payment
interval.
 Regular or periodic payment, R
– the amount of each payment.
 Amount (Future Value) of an
annuity, F – sum of future
values of all the payments to
be made during the entire
term of the annuity.
Example:
1. Suppose Mrs. Remoto
would like to save ₱3,000
at the end of each month,
for six months, in a fund
that gives 9% compounded
 monthly. How much is the
amount or future value of
her savings after 6 months?
2. In order to save for her high
school graduation, Marie
decided to save ₱200 at the
end of each month. If the
bank pays 0.25%
compounded monthly,
how much will her money
at the end of 6 years?