A firm plans to make investments of $5,000 for the next 10 years, paying the amount at the end of each year. this form of payment represents an ordinary annuity. The term ordinary annuity describes situation in which equal payments are made at the end of consecutive periods over a fixed length of time.
In our case the payment is equal, $5,000, it is payed in consecutive periods (every year ) and over a fixed length of time (10 years).
