Annuity: Difference between revisions

Revision as of 15:27, 30 May 2015

A series of equal future periodic cash flows, starting one period into the future.
More generally, any series of future periodic cash flows, either equal in amount or growing at a fixed compound rate per period, starting at a future date or already in payment, and usually ending at a later future date.

Any financial arrangement in which a periodic income is paid to an individual, often as a pension.
An insurance contract purchased from a life assurance company that pays an income in exchange for a lump sum.

There are many variations on such annuities, depending on the nature of the income stream.

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 =====Future periodic cash flows=====
-. A series of equal future periodic cash flows, starting at Time 1 period hence and ending at a predetermined future Time n periods hence.
+#A series of equal future periodic cash flows, starting one period into the future.
+#More generally, any series of future periodic cash flows, either equal in amount or growing at a fixed compound rate per period, starting at a future date or already in payment, and usually ending at a later future date.
-. More generally, any series of future periodic cash flows, either equal in amount or growing at a fixed compound rate per period, starting at a future time or already in payment, and usually ending at a later future time.
 =====Periodic income=====
-. Any financial arrangement in which a periodic income is paid to an individual, often as a pension.
+#Any financial arrangement in which a periodic income is paid to an individual, often as a pension.
+#An insurance contract purchased from a life assurance company that pays an income in exchange for a lump sum.
-. An insurance contract purchased from a life assurance company that pays an income in exchange for a lump sum.