Information On High Interest Annuities
by admin on 01/01/09 at 7:24 am
If you know anything about annuities, you will be aware that they come in many shapes and sizes. One of these forms includes what we in the financial industry call: high interest annuities. Basically, this is a regular stream of payments (of the same amount), which incorporates a high level of interest income - perhaps to compensate for higher risk, etc. Are you with me? What I’m saying is that high interest annuities are just like any other annuity, except the implied interest rate is higher than most others in the annuity class.
Why do we focus on these types of things? Well, it’s because an annuity is a very common financial vehicle. Essentially anything which is paid over time runs the chance of being an annuity. The formula running behind the idea is particularly complex, and had it not have been for the financial mathematicians coming up with such a formula for this financial phenomenon, it would be almost impossible to calculate the future value of a stream of payments, or the implied interest rate on which your investment is based.
