Answer:
Explanation:
A simple annuity, also known as an ordinary annuity, refers to a series of equal cash flows occurring at the end of each period. In other words, payments are made and received at the end of each period.
On the other hand, a general annuity, also known as an annuity due, refers to a series of equal cash flows occurring at the beginning of each period. This means that payments are made and received at the beginning of each period.
The key difference between the two is the timing of the cash flows. In a simple annuity, the cash flows occur at the end of each period, while in a general annuity, the cash flows occur at the beginning of each period.
Additionally, when calculating the present value or future value of an annuity, the formulas used for a simple annuity and a general annuity differ, as the timing of the cash flows affects the compounding or discounting process.