Primary Task Response: Within the Discussion Board area, write 500–700 words that respond to the following questions with your thoughts, ideas, comments, and research. This will be the foundation for future discussions by your classmates. Be substantive and clear, and use examples to reinforce your ideas.
In the previous Phase, you were asked to discuss the time value of money concept as it applies to “single payment” investments. In Phase 2, you will be asked to consider investments that are made over several periods of time rather than all at once. If the payments are the same amounts made at regular intervals, their present and future values can be determined using the annuity model presented in this Phase.
In your initial post, identify and recommend at least 1 credible Web site that an investor can visit to learn more about annuities, and address at least 3 of the following questions:
- What is an annuity, and what are some examples of “real-life” annuities?
- What is the difference between an ordinary annuity and an annuity due?
- How are the present and future value of annuities calculated using at least 1 of the methods presented in the text?
- How does more frequent compounding affect the present and future value of an annuity?
- How does an increase in the rate of return affect the present and future value of an annuity?
- What is the effective annual rate (EAR), how does it differ from the annual percentage rate (APR), and how is it calculated?
Be sure to document your posts with in-text citations, credible sources, and properly listed references.