Difference between ordinary annuity and annuity due - QS Study
QS Study

The difference between ordinary Annuity and Annuity Due are below:

Ordinary Annuity:

  1. Definition: Ordinary annuity is the payment or receipt occurs at the end of each period.
  2. Cash flows start: At the end of each period.
  3. Indicator: End of the year, after one year, one year from now, from next year etc.
  4. period: One period is less than annuity due.
  5. Interest factor: One interest factor is less than annuity due.
  6. Total value: Total value of money is less than that of the annuity due.

Annuity Due:

  1. Definition: Annuity due is the payment or receipt occurs at the beginning of each period.
  2. Cash flows start: At the beginning of each period.
  3. Indicator: Beginning of the year , now immediately, start of the year etc.
  4. period: One extra period is more than ordinary annuity.
  5. Interest factor: One interest’s factor is more than ordinary annuity.
  6. Total value: Total value of money is more than that of ordinary annuity.