Annuity in advance

Annuity in advance,

Definition of Annuity in advance:

  1. Annuity in advance has nothing to do with the financial or insurance product "annuity," despite the use of the word. Another way to describe an annuity in advance is a series of equal payments that are received at the beginning of each equally spaced period. The payment is made before a service is rendered or before a good changes hands, so no interest is applied. It also means that the present value of an annuity in advance is higher than payments made later, such as after a service is provided or goods change hands.

  2. Periodic payments (such as rent) that are due at the beginning of a period. Also called annuity due. See also annuity in arrears.

  3. Annuity in advance is a series of payments that are due at the beginning of each successive time period. Rent is the classic example of an annuity in advance for a landlord because it is a sum of money paid at the beginning of each month to cover the period to follow. An annuity in advance, a legal and accounting term, is also called an "annuity due.".

How to use Annuity in advance in a sentence?

  1. An annuity in advance has nothing to do with the insurance product called an annuity.
  2. Annuity in advance is a payment due at the beginning of each successive period.
  3. An annuity in advance has three defining characteristics: the amount of each payment is the same, the payment schedule is regular intervals (weekly, monthly, quarterly), and payment is due at the beginning of each period.
  4. Apartment rent is an example, as the landlord typically expects payment at the beginning of each month.

Meaning of Annuity in advance & Annuity in advance Definition