Simple Annuities Defnition oTerms: An annuityis a sequence oequal payments made at regular intervals otime Payments may be made annually, semi-annually, quarterly, or at oter period Some e!amples oannuities are: "# montly payments orent, $# %ee&ly %ages, '# annual premiums on a lie insurance policy, (# periodic pensions, )# periodic payments on install ment purcases, and *# semi-annual interest payments on a bond. Annuities are classifed into annuity certain and contingent annuity: "# An annuity certain is an annuity in %icpayments begin and end at f!ed +nstallment payments are an annuity certain. $# A contingent annuity is an annuity %ose payments depend upon an event cannot be oretold accurately. ie insurance premiums are an e!ample ocontingent annuity, because te payments ends at te deatote insured. an insured %ould die is uncertain.