Annuity Table

AAA

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.

INVESTOPEDIA EXPLAINS '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.



VIDEO

RELATED TERMS
  1. Future Value Of An Annuity

    The value of a group of payments at a specified date in the future. ...
  2. Annuity

    A financial product sold by financial institutions that is designed ...
  3. Annuity Due

    An annuity whose payment is to be made immediately, rather than ...
  4. Immediate Payment Annuity

    An annuity contract that is purchased with a single lump-sum ...
  5. Deferred Annuity

    A type of annuity contract that delays payments of income, installments ...
  6. Annuity Contract

    The written agreement between an insurance company and a customer ...
Related Articles
  1. Investing Basics

    Calculating The Present And Future Value ...

  2. Bonds & Fixed Income

    Passing The Buck: The Hidden Costs Of ...

  3. Options & Futures

    Getting the Whole Story on Variable ...

  4. Options & Futures

    Selecting The Payout On Your Annuity

Hot Definitions
  1. Turkey

    Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities ...
  2. Conduit Issuer

    An organization, usually a government agency, that issues municipal securities to raise capital for revenue-generating projects ...
  3. Financing Entity

    The party in a financing arrangement that provides money, property, or another asset to an intermediate entity or financed ...
  4. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  5. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
  6. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
Trading Center