An annuity is a series of equal payments occuring at equal time intervals, and this amount includes the sum of all payments plus interest, if allowed to accumulate at a definite rate of interest from the time of initial payment to the end of annuity term. Ordinary annuity is used in the calculation of the__________________?

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Accepted Answer

Depreciation by sinking fund method. The sinking fund method uses the concept of an annuity to calculate the required periodic payments needed to accumulate a lump sum (like the cost of an asset) by a future date.