BM9.4 – Deferring Annuities

Chapter 9, Lesson 4

In this lesson students will:

  • calculate the present value of a deferred annuity
  • calculate the future value of an annuity in which payments stop part-way through the term

Deferring an Annuity

In this lesson, we will explore how to solve annuities that occur before or after a deferral period. There are two types of deferral periods. The first occurs when, instead of beginning the payments now, we defer the equal sized payments to some point in the future. The other occurs when we begin payments now, stopping the payments at some point in time, and allowing our funds to accrue interest for a period of time. Let’s explore how to work through these to cases in the following video.

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