In our day-to-day life we have lot of money transactions. In many transactions payment is made in single payment or in equal installments over a certain period of time. The amounts of these installments are determined in such a way that they compensate for their waiting time. In other cases, in order to meet future planned expenses, a regular saving may be done. (i.e) at regular time intervals, a certain amount may be kept aside, on which the person gains interest. In such cases the concept of annuity is used.