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What is the difference between an annuity due and ordinary annuity?

The key difference relates to when payment is made by the customer. Let’s say that the period is January 1st to December 31st.

Under an annuity due, payment would be due at the beginning of the period, which would be January 1st. Under an ordinary annuity, payment would be due at the end of the period, which would be December 31st.

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