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# Finance Dictionary - A Terms

# Annuity Due

When a cash flow occurs at the beginning of each annuity period, the annuity becomes an annuity due. Since the cash flows in the n-year annuity due occurs at the beginning of each year, they are invested for one extra period of time compared to the n-year regular annuity. This means all the annuity due cash flows are invested at r percent interest for an extra year.