Compounding Price and you may Capitalising Rates -The latest compounding speed is used from inside the endeavor investigations to search for the introduce property value prior financing / cash flow, while the fresh capitalising price are applied from the reverse process of discerning introduce worth of upcoming dollars moves.

Annuity:

An annuity is actually a cash flow, often earnings otherwise outgoings, within same sum for the for each and every several months. A keen annuity is the commission otherwise receipt from equivalent cashflows for every several months to possess a selected timeframe. Instance, whenever a friends set aside a predetermined sum annually in order to meet another obligations, it’s using annuity.