What is a Deferred Annuity?
Deferred annuities, also known as "deferred annuities," refer to a series of equivalent receipts and payments in subsequent periods when there are no receipts or payments in the first several periods. It is a special form of ordinary annuity. Ordinary annuities, also known as "post-paid annuities," refer to annuities with equal receipts and payments at the end of each period. This form of annuity is the most common in real economic life. The final value of an ordinary annuity is like the sum of the principal and interest of zero deposits and rounds. It is the sum of the final value of the compound interest of the same amount of payments at the end of each period within a certain period.
Deferred annuity
- The so-called deferred annuity is a concept of "zero deposit and full payment", and it is divided into two phases: one is the accumulation period and the other is the settlement period; that is, the insured pays a certain period of time (accumulation period), and then An insurance company pays an annuity for a certain period of time or after the insured person retires (settlement period). The annuity can be purchased by paying premiums or instalments. If the insured dies before the annuity begins to pay, the insurance company sometimes gives the beneficiary the balance of the annuity account during the period or once.
- There are many expressions of the role in human resource management, the common ones are:
- Assume that there are no receipts and payments in the first period of m, and the same amount of receipts and payments in the following n periods. The present value of the deferred annuity is the present value of the discounted annuities in the next n periods to the beginning of the first period of the m period. The calculation formula is: V0 = A * PVIFAi, n * PVIFi, m The present value of the deferred annuity can also be calculated by another method. First, find the present value of the annuity after the m + n period, minus the previous m period without payment. The present value of the postpaid annuity, the difference between the two is the present value of the postpaid annuity of the n period postponed m periods. The calculation formula is: V0 = A * PVIFAi, m + nA * PVIFAi, m = A * (PVIFAi, m + nPVIFAi, m)
- Example: An enterprise borrows a sum from a bank, and the annual interest rate of the bank loan is 8%. The bank stipulates that the principal and interest need not be paid in the first 10 years, but the principal and interest are repaid at the end of each year from the 11th to the 20th year. Ask this Money
- When calculating the present value of deferred annuity, if it encounters the problem at the beginning of the period, it can be converted into the problem at the end of the period. If it is paid from the beginning of the fourth year, it is equivalent to the payment from the end of the third year.
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