Annuity: Difference between revisions
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=====Future periodic cash flows===== | =====Future periodic cash flows===== | ||
1. A series of equal future periodic cash flows, starting one period into the future. | |||
2. 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. | |||
=====Periodic income===== | =====Periodic income===== | ||
3. Any financial arrangement in which a periodic income is paid to an individual, often as a pension. | |||
4. An insurance contract purchased from a life assurance company that pays an income in exchange for a lump sum. | |||
Revision as of 10:16, 31 May 2015
Future periodic cash flows
1. A series of equal future periodic cash flows, starting one period into the future.
2. 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.
Periodic income
3. Any financial arrangement in which a periodic income is paid to an individual, often as a pension.
4. 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.
