Loading the player...

DEFINITION of 'Annuity Table'

A method for determining the present value of a structured series of payments. The annuity table provides a factor, based on time and a discount rate, by which an annuity payment can be multiplied to determine its present value. For example, an annuity table could be used to calculate the present value of an annuity that paid $10,000 a year for 15 years if the interest rate is expected to be 3\%. Financial calculators and computer software can also be used for this purpose.

BREAKING DOWN 'Annuity Table'

A lottery winner could use an annuity table to determine whether it made more financial sense to take his lottery winnings as a lump-sum payment today or as a series of payments over many years. Lottery winnings are a rare form of annuity; more commonly, annuities are a type of investment used to provide individuals with a steady income in retirement.



RELATED TERMS
  1. Annuity Due

    An annuity whose payment is to be made immediately, rather than ...
  2. Delayed Annuity

    An annuity in which the first payment is paid at a later date ...
  3. Annuity

    A financial product that pays out a fixed stream of payments ...
  4. Secondary Market Annuity

    A secondary market annuity (SMA) is a transaction in which the ...
  5. Deferred Payment Annuity

    An annuity where the payments received will start some time in ...
  6. Annuity In Advance

    An amount of money that is regularly paid at the beginning of ...
Related Articles
  1. Retirement

    Are Annuities Retirement-Only Investments?

    Learn more about why annuities are generally purchased and the way that they can positively and negatively affect an individual preparing for retirement.
  2. Retirement

    How a Fixed Annuity Works After Retirement

    These popular investments can provide a steady stream of income during your retirement years. Here are the details.
  3. Investing

    DIY Annuities: What You Need to Know

    Annuities are attractive because they can give you a stream of income, but they can be tricky to buy.
  4. Financial Advisor

    Are Annuities Right for You?

    Annuities are safe and often appealing, but IRAs and 401(k)s offer advantages that annuities typically can’t match, with little additional risk.
  5. Financial Advisor

    Annuities: A Good Option in Turbulent Times?

    Annuities can be an enticing option as Americans near retirement, but there are several reasons to be wary of them.
  6. Retirement

    How to Calculate the Value of Annuities

    Here's everything you need to account for when calculating the present and future value of annuities.
  7. Retirement

    Guaranteed Retirement Income In Any Market

    By laddering annuities, you can be sure you'll have income no matter what the market does.
  8. Retirement

    Who Benefits From Retirement Annuities

    Annuities guarantee some degree of fixed income in retirement. But is the security worth the fees and less favorable tax treatment? How to decide.
  9. Retirement

    5 Mistakes to Avoid When Shopping for Annuities

    Annuities give retirees guaranteed income but they aren't all created equal.
  10. Financial Advisor

    Advising FAs: Explaining Annuities to a Client

    Conceptually speaking, annuities can be thought of as a reverse form of life insurance.
RELATED FAQS
  1. For what types of financial instruments would I want to calculate the present value ...

    Learn about the types of financial instruments the present value of an annuity calculation is most useful for, including ... Read Answer >>
  2. What is the difference between the present value of an annuity and the future value ...

    Find out about the difference between the future value and present value of a fixed annuity, including how to use these calculations ... Read Answer >>
  3. What are the risks of annuities in a recession?

    Distinguish between the most common types of annuities, and understand which types of annuities pose the most risk during ... Read Answer >>
  4. Why would I need to calculate the present value of an annuity?

    Find out what information is needed to calculate the present value of an annuity, including an example of the present value ... Read Answer >>
  5. How do I calculate the future value of an annuity?

    Find out how to calculate the future value of an ordinary annuity or an annuity due, including how the power of compounding ... Read Answer >>
Hot Definitions
  1. IRS Publication 970

    A document published by the Internal Revenue Service (IRS) that provides information on tax benefits available to students ...
  2. Federal Direct Loan Program

    A program that provides low-interest loans to postsecondary students and their parents. The William D. Ford Federal Direct ...
  3. Cash Flow

    The net amount of cash and cash-equivalents moving into and out of a business. Positive cash flow indicates that a company's ...
  4. PLUS Loan

    A low-cost student loan offered to parents of students currently enrolled in post-secondary education. With a PLUS Loan, ...
  5. Graduate Record Examination - GRE

    A standardized exam used to measure one's aptitude for abstract thinking in the areas of analytical writing, mathematics ...
  6. Graduate Management Admission Test - GMAT

    A standardized test intended to measure a test taker's aptitude in mathematics and the English language. The GMAT is most ...
Trading Center