The key difference between an annuity immediate and an annuity due is the timing of payments. In an annuity immediate, payments are made at the end of each period, whereas in an annuity due, payments are made at the beginning of each period.
The term "immediate" might seem misleading since …
Loans come in different shapes and sizes, but when it comes to repayment, two common structures stand out: equal payment loans (also known as annuity loans) and equal principal loans (fixed principal). Understanding these repayment methods is essential for borrowers and financial professionals alike, as they impact how interest is …
Net premium reserves play a fundamental role in actuarial calculations, ensuring that insurance companies can meet future liabilities. They represent the amount set aside to balance the insurer's obligations and policyholders' contributions over time. Understanding their calculation is crucial for anyone working with insurance models or cash flow projections.
In …
Buying a home is one of the biggest financial decisions in life. A real estate mortgage makes it possible, but how does it actually work? Everyone - not only actuaries- becomes very interested in the mechanics of a mortgage once they take one. Understanding how loan payments are structured and …
Model variables are fundamental to financial cash flow models, shaping how calculations unfold over time. In this blog post, we will explore different types of model variables and demonstrate how to create them using the cashflower package.
Understanding how to define and use model variables effectively is crucial for …