Use of Annuities (HSC SSCE Mathematics Standard): Flashcards

Each payment reduces amount owed and interest on remaining balance

Payment no., amount, interest, principal change, balance

Decreases with each payment as balance becomes smaller

Increases with each payment

Regular payments build savings for retirement

$9.5\%$ of income

Regular contributions and compound interest

$FV = PV(1 + r)^n$

$I = FV - PV$

Loans decrease, investments increase over time