Exclusion Ratio

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DEFINITION of 'Exclusion Ratio'

The portion of the return on investments that is income tax exempt. It represents a payback of initial investments rather than capital gains.

INVESTOPEDIA EXPLAINS 'Exclusion Ratio'

The exclusion ratio arises mainly through different forms of non-qualified insurance annuities.

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  2. What exact information is included in the interest rate when calculating the present ...

    When calculating the present value of an annuity, the interest rate percentage is the rate at which future payments are discounted ... Read Full Answer >>
  3. How do you calculate a present value of annuity using Excel?

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  4. What is the difference between the present value of an annuity and the future value ...

    The present value of an annuity represents the sum that must be invested now to guarantee a desired payment amount in the ... Read Full Answer >>
  5. Why would I need to calculate the present value of an annuity?

    To calculated the present value of an annuity, all that is needed is the interest rate, payment amount and number of periods ... Read Full Answer >>
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    Because Social Security income does not continue indefinitely, it cannot be classified as a perpetuity. What Is a Perpetuity? A ... Read Full Answer >>
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