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CFA Level 1 CFA: Time value of Money (TVM), Part 2

Nicole Seaman

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An Annuity is a finite set of level sequential cash flows. An Ordinary Annuity has a first cash flow that occurs one period from now (indexed at t = 1). An Annuity Due has a first cash flow that occurs immediately (indexed at t = 0). A Perpetuity is a perpetual annuity (a set of level never-ending sequential cash flows, with the first cash flow occurring one period from now).


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