# What does continuously payable annuity mean?

I am preparing for F< exam but I am unable to understand the meaning of continuously payable annuity.

What does it mean? An example would be great.

## 1 Answer

in the context of bonds / fixed income an annuity is a payment which is made at regular time intervals - a cupon. A continuous one is simply being paid for an unlimited amount of time.

PV = Cupon/ (1+r)^1 + ...... Cupon/ (1+r)^t


just to add to Bob's comment above, a "continuously compounding" annuity is re-invested at the same rate every month on top of your principal value and previous annuity payments - gaining interest on interest. the formula is this:

• Thanks for your answer. It really helped me to understand this. – RajSharma Jan 28 '16 at 13:55