Annuity In Advance

Annuity In Advance

An amount of money that is regularly paid at the beginning of a term. Rent is the classic example of an annuity in advance because it is a sum of money paid at the beginning of the month to cover the 30 days to follow. An annuity in advance is also called an "annuity due."

The opposite of an annuity in advance is an annuity in arrears (also called an "ordinary annuity"). Mortgage payments are an example of an annuity in arrears. Like rent payments, mortgage payments are due on the first of the month; however, the mortgage payment covers the previous month’s interest and principal on the mortgage loan.

One instance where the difference between an annuity in advance and an annuity in arrears matters is in the valuation of income properties. If payments are received at the beginning of the rental period rather than at the end of the rental period, their present value increases.

Don't be confused by the name: an "annuity in advance" is not the type of investment product that we usually think of when we hear the word "annuity" in finance.

Investment dictionary. . 2012.

Игры ⚽ Нужен реферат?

Look at other dictionaries:

  • annuity in advance — noun an annuity paid in a series of more or less equal payments at the beginning of equally spaced periods rent payable in advance constitutes an annuity in advance for the landlord • Hypernyms: ↑annuity, ↑rente • Hyponyms: ↑rent …   Useful english dictionary

  • Annuity (European financial arrangements) — An annuity can be defined as a contract which provides an income stream in return for an initial payment.Immediate annuityAn immediate annuity is an annuity for which the income stream begins at a time after the initial payment which is less than …   Wikipedia

  • annuity due — noun (plural annuities due) : an annuity providing for the first payment at the beginning rather than at the end of the first period * * * annuity due noun One whose first payment is due in advance • • • Main Entry: ↑annuity …   Useful english dictionary

  • Аннуитет авансовый — (ANNUITY IN ADVANCE или ANNUITY DUE) аннуитет, платежи по которому осуществляются в начале каждого периода в отличие от обычного аннуитета, в котором выплаты производятся в конце каждого периода …   Словарь инвестиционных и оценочных терминов

  • rente — noun income from capital investment paid in a series of regular payments his retirement fund was set up to be paid as an annuity • Syn: ↑annuity • Hypernyms: ↑regular payment • Hyponyms: ↑annuity in advance, ↑ordinary …   Useful english dictionary

  • List of Acts of Parliament of the United Kingdom Parliament, 1801-1819 — This is an incomplete list of Acts of the Parliament of the United Kingdom for the years 1801 1819. For acts passed prior to 1707 see List of Acts of Parliament of the English Parliament and List of Acts of Parliament of the Scottish Parliament.… …   Wikipedia

  • List of Acts of the Parliament of the United Kingdom, 1801–1819 — UK Legislation Acts of Parliament by states preceding the United Kingdom Of the Kingdom of England Before 1485 1485–1601 · 1603–1641 Interregnum (1642–1660) 1660–1699 · 1700–1706 …   Wikipedia

  • Arrears — is a legal term for a type of debt which is overdue after missing an expected payment. It is also used (in the form in arrears) for payments that occur at the end of a period.Arrears accrue from the date on the first missed payment was due. The… …   Wikipedia

  • Business and Industry Review — ▪ 1999 Introduction Overview        Annual Average Rates of Growth of Manufacturing Output, 1980 97, Table Pattern of Output, 1994 97, Table Index Numbers of Production, Employment, and Productivity in Manufacturing Industries, Table (For Annual… …   Universalium

  • Pennsylvania Lottery — logo The Pennsylvania Lottery is operated by the Commonwealth of Pennsylvania. The lottery was created by the Pennsylvania General Assembly on August 26, 1971; two months later, Henry Kaplan was appointed as its first executive director. The… …   Wikipedia

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”