Delayed Annuity

AAA

DEFINITION of 'Delayed Annuity'

An annuity in which the first payment is paid at a later date in the future. A delayed annuity, similar to a regular annuity consists of a stream of cash flows provided to the annuity holder. However, cash payments do not begin to flow immediately, instead following a predetermined future schedule.

INVESTOPEDIA EXPLAINS 'Delayed Annuity'

If Steve was to receive five yearly payments of $100 at the end of each year starting this year, then this payout would be considered an ordinary annuity. On the other hand, if the five payments are deferred for 10 years, this instrument is classified as a delayed annuity. In order to determine the net present value of the delayed annuity, the payments must be discounted to year zero (the present).

VIDEO

RELATED TERMS
  1. Present Value Of An Annuity

    The current value of a set of cash flows in the future, given ...
  2. Future Value Of An Annuity

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

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

    A series of equal payments made at the end of each period over ...
  5. Annuity

    A financial product sold by financial institutions that is designed ...
  6. Free Application For Federal Student ...

    The form that must be completed in order to qualify for any type ...
Related Articles
  1. Calculating The Present And Future Value ...
    Investing Basics

    Calculating The Present And Future Value ...

  2. 7 Tools For Rebuilding Retirement Savings
    Retirement

    7 Tools For Rebuilding Retirement Savings

  3. An Overview Of Annuities
    Home & Auto

    An Overview Of Annuities

  4. What Is An Annuity?
    Retirement

    What Is An Annuity?

comments powered by Disqus
Hot Definitions
  1. Debit Spread

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

    Money borrowed by one country from another country and then misappropriated by national rulers. A nation's debt becomes odious ...
  3. Takeover

    A corporate action where an acquiring company makes a bid for an acquiree. If the target company is publicly traded, the ...
  4. Harvest Strategy

    A strategy in which investment in a particular line of business is reduced or eliminated because the revenue brought in by ...
  5. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  6. Pareto Principle

    A principle, named after economist Vilfredo Pareto, that specifies an unequal relationship between inputs and outputs. The ...
Trading Center