What is the common annuity?
common annuity is a number of payments that are made regularly, at the end of the period, such as the month or year. Common annuity is usually paid for a fixed time. A fixed mortgage mortgage is an example of common annuity, as well as a bond with straight coupon payments.
common annuity is sometimes called annuity in arrears. This name is used because payments are made at the end of the monthly or season, not at the beginning. If the payments were made at the beginning of the period, the contract would be called the annuity in advance or the annuity due. Annuity payments can also be made quarterly or half -yearly. Bond payments are often semi -annual.
The amount of monthly payments or annual payments from normal annuity is calculated from the balance of principal and the time of annuity. The interest rate and the future value of annuity are also taken into account. The future value provides the total cost of the loan, in the case of a mortgage or total return on the investment in the case of a bond. These factors determine the amount of periodic payments, toTerey is usually determined for the period of annuity.
ordinary annuity is sometimes referred to as immediate annuity. Anuita-ImMediate is an annuity that has one purchase payment rather than more purchase payments over time. Annuity payments start immediately after purchasing an annuity contract. In the case of a mortgage, the creditor provides the amount of principal and the payment starts at the end of the first month after the closure. In the case of a bond, the investor buys payments of bonds and coupons after six months and continues for the duration of the bond.
Annuity can also be used to ensure a regular stream of income for retirement people. Usually do not have these annuity a specified period of time, but rather payments will continue as long as they live annitant. There may be a minimum time for which payments are made, but continue at least as long as a person or in some cases lives a couple. In this case, when the dischargeI also read payments are considering the age of annuitants.