1. Annuities, Stocks, and Bonds
Chapter Eleven
Annuities, Stocks, and Bonds

2. Annuities and Retirement Accounts
Section 11.1
Annuities and Retirement Accounts

3. Definitions:
Annuity: a series of equal payments made at regular intervals.
Ordinary Annuity: Annuity in which payments are made at the end of the period
Payment Period: the time between payments
Term: the time from the first payment through the last payment

4. To find the Amount of an Annuity:
Amt = Payment x # from table
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At the end of every quarter, $2000 is put into a retirement plan that earns 6% compounded quarterly. Find the future value in 5 years.

5. Bob Nelson deposits $250 into a retirement account at the end of every month for 30 months. The fund hold international stocks and Nelson optimistically thinks it may yield 12% compounded monthly. Find the future amount.

6. Annuity DUE
Annuity DUE: payments are made at the beginning of each period instead of the end.
1. Add 1 to the # of periods
2. Amount = payment x # from table
3. Subtract ONE PAYMENT from that amount.

7. If $1000 is deposited at the beginning of every six months into an account that earns 5% compounded semiannually, find the amount after 8 years.