What is the difference between an annuity and a perpetuity?

What is the difference between an annuity and a perpetuity Introduction: The Basics of Annuities and Perpetuities Hello and welcome to our video on the difference between annuities and perpetuities. Both these terms are frequently used in the realm of finance, but they represent distinct concepts. Today, we'll explore what makes annuities and perpetuities unique, their applications, and how they function. So, let's get started! Defining Annuities: A Stream of Payments An annuity is a financial product that involves a series of regular payments. These payments can be made at fixed intervals, such as monthly or annually. Annuities are often used for retirement planning, as they provide a steady income stream. They can be purchased from insurance companies or other financial institutions. Annuities can be further categorized into several types, such as fixed, variable, or indexed annuities, each with its own features and benefits. Perpetuities: Payments That Last Forever Unlike annuities, perpetuities are payments that continue indefinitely. They have no fixed end date.