Annuity in advance,
Definition of Annuity in advance:
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.
Periodic payments (such as rent) that are due at the beginning of a period. Also called annuity due. See also annuity in arrears.
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?
- An annuity in advance has nothing to do with the insurance product called an annuity.
- Annuity in advance is a payment due at the beginning of each successive period.
- 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.
- 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
