Chapter-1 Cashflow Models

Cashflows - These are simply sums of money, which are paid or received at different times.
Real terms means taking into account inflation and nominal means ignoring inflation.

Chapter-6 LEVEL ANNUITIES

Annuity is a regular series of payments. Annuity certain is an annuity payable for a definite period of
time. Payments made:-

1. End of time period - paid in arrear

2. Beginning of time period - paid in advance

Some more key definitions:-

Annuity Due Annuity paid in advance.

Immediate Annuity first payment made during the first period.
Deferred Annuity No payments made during the first period.
Level Annuity Each payment is of the same amount.
Simple Increasing (Decreasing) Annuity Payments increase (decrease) each time by the
same amount.

Present Values