An annuity is an equal, annual series of cash flows. Annuities may be equal annual deposits, equal annual withdrawals, equal annual payments, or equal annual receipts. The key is equal, annual cash flows.
Annuities work the way shown in the following explanation.
Note that the cash flows occur at the end of the year. This makes the cash flow an ordinary annuity . If the cash flows were at the beginning of the year, they would be an annuity due . Annuities due will be covered a later. Again, there are tables for working with annuities.