What Are The Basic Types Of Funds?

The calculation of the time value of capital is the basis of financial management. First, we must learn to distinguish the two basic types of capital: one-time payment and annuity, if we want to grasp the calculation methods and calculation skills of the time value of capital. This is the key to the calculation of the time value of capital.

In fact, as the two basic types of funds have certain characteristics and rules in the way, time and amount of payment, we can sum up the time value of different types of funds.

(1) lump sum payment: at a specific time point.

(two) annuity: a series of payments that are collected every time in a certain period.

The characteristic of annuity is that the income or payment of funds is not a one-time occurrence, but occurs in equal amounts, and the intervals between each occurrence are equal.

According to the specific time points of each payment, the annuity can be divided into ordinary annuity, immediate annuity, deferred annuity and perpetual annuity.

Among them, ordinary annuity and immediate payment are two basic types of annuity.

1. ordinary annuity: it refers to a series of payments that are collected from the first stage and equal to each period in a certain period of time, also known as the later payment annuity.

2. immediate payment annuity refers to a series of payments that are payable at the beginning of the first stage and at the beginning of each period in a certain period.

3. deferred annuity refers to a series of payments that are started after the first stage and are paid at the end of each period in a certain period.

4. perpetuity annuity refers to a series of payments from the first stage, which are collected at the end of each period indefinitely.