Figure 7.2 shows the timeline for a regular constant annuity where A is the constant periodic cash flow, n is the number of cash flows, and r is the periodic discount rate. Most often the word "constant" is dropped and unless otherwise qualified, an annuity is assumed to be a constant annuity. In a regular annuity, the first annuity payment occurs at time 1, that is, in one period from now or at the end of the first period. Such an annuity is called a regular annuity or an annuity in arrears. We can calculate the present value PVC0 and future value FVCn of an annuity in arrears as:
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