An ordinary annuity is a financial product that involves a series of equal payments made at the end of each period over a specified term. This type of annuity is often used in contexts such as loans, where regular payments are made to repay borrowed funds, or in investment scenarios where individuals receive regular income from their invested capital. Understanding ordinary annuities is crucial for calculating the present and future values of cash flows, which are essential in personal financial management and loan assessments.
congrats on reading the definition of ordinary annuity. now let's actually learn it.