Ordinary Annuity

Dictionary Says

Definition of 'Ordinary Annuity'

A series of equal payments made at the end of each period over a fixed amount of time. While the payments in an annuity can be made as frequently as every week, in practice, ordinary annuity payments are made monthly, quarterly, semi-annually or annually. The opposite of an ordinary annuity is an annuity due, where payments are made at the beginning of each period.
Investopedia Says

Investopedia explains 'Ordinary Annuity'

Examples of ordinary annuities are interest payments from bond issuers, which are generally paid semi-annually, and quarterly dividends from a company that has maintained stable payouts for years.  The present value of an ordinary annuity is largely dependent on the prevailing rate of interest. Because of the time value of money, rising interest rates will reduce the present value of an ordinary annuity, while declining interest rates will increase its present value. This is because the value of the annuity is based on what return you can get elsewhere. If you can get a higher interest rate somewhere else, the value of the annuity in question goes down. Most testing questions will be based on an ordinary, so you need to be careful that your calculator is not in annuity due mode, usually denoted with "BEG" (representing beginning).

 

Search results for

'Ordinary Annuity'

  • Calculating The Present And Future Value Of Annuities

    http://www.investopedia.com/articles/03/101503.asp
    ... Calculating the Future Value of an Ordinary Annuity If you know how much you can
    invest per period for a certain time period, the future value of an ordinary ...
  • Advanced Bond Concepts: Bond Pricing | Investopedia

    http://www.investopedia.com/university/advancedbond/advancedbond2.asp
    ... The succession of coupon payments to be received in the future is referred to as
    an ordinary annuity, which is a series of fixed payments at set intervals over ...
  • CFA Level 1 Study Guide - Quantitative Methods - Time Value Of ...

    http://www.investopedia.com/exam-guide/cfa-level-1/quantitative-methods/time-value-money-calculations.asp
    Sign In• Register• Free Annual Reports • Free Newsletters. Dictionary;
    Investing; Markets; Personal Finance; Active Trading; Forex; ...
  • Taking The Bite Out Of Annuity Losses

    http://www.investopedia.com/articles/pf/05/AnnuityLosses.asp
    ... the federal capital gains rate down from 28% to 20%, and down again to the current
    15%, while maintaining the ordinary income taxation of annuity profits (when ...
  • Series 6 Study Guide - Taxation Issues - Tax Treatment of Variable ...

    http://www.investopedia.com/exam-guide/finra-series-6/taxation-issues/tax-treatment-variable-annuity-contracts.asp
    ... However, once withdrawn, all earnings are taxed as ordinary income Annuity Withdrawal
    Taxation If investors withdraw from an annuity prior to age 59 ½ a 10 ...
  • Saving Money With A Private Annuity Trust

    http://www.investopedia.com/articles/retirement/06/PrivateAnnuity.asp
    ... Future payments will then be treated as ordinary income. The private annuity trust's
    cash flow will stop when there is no more money, or when you die. ...
  • Series 6 Study Guide - Variable Contracts - Annuity Distributions ...

    http://www.investopedia.com/exam-guide/finra-series-6/variable-contracts/annuity-distributions.asp
    ... Variable Contracts - Annuity Distributions. Taxation Withdrawals from an
    annuity are subject to ordinary income taxes on earnings. ...
  • Series 26 Study Guide - Variable Contracts - Annuity Distributions ...

    http://www.investopedia.com/exam-guide/series-26/variable-contracts/annuity-distributions-charges.asp
    ... Variable Contracts - Annuity Distributions and Variable Annuity Charges. Taxation
    Withdrawals from an annuity are subject to ordinary income taxes on earnings. ...
  • Selecting The Payout On Your Annuity

    http://www.investopedia.com/articles/retirement/05/071105.asp
    ... is usually not recommended because, in the year you take the lump sum, ordinary
    income taxes will be due on the entire investment-gain portion of your annuity. ...
  • CFA Level 1 Study Guide - Quantitative Methods - Net Present Value ...

    http://www.investopedia.com/exam-guide/cfa-level-1/quantitative-methods/discounted-cash-flow-npv-irr.asp
    Sign In• Register• Free Annual Reports • Free Newsletters. Dictionary;
    Investing; Markets; Personal Finance; Active Trading; Forex; ...

Related Articles

Bank Rates
Product Today Last Wk
$10K MMA 0.50% 0.51%
MMA 0.45% 0.46%
6 Month CD 0.46% 0.47%
1 Year CD 0.70% 0.75%
5 Year CD 1.46% 1.46%
1 Year Jumbo CD 0.66% 0.67%
Rate data provided by Bankrate
Product Today Last Wk
$30K HELOC 4.59% 4.60%
$30K Home Equity Loan 5.74% 5.77%
$50K Home Equity Loan 5.45% 5.50%
$50K HELOC 4.24% 4.24%
$100K Home Equity Loan 5.41% 5.46%
$100K HELOC 4.13% 4.13%
Rate data provided by Bankrate
Product Today Last Wk
30 Year Fixed 3.80% 3.80%
15 Year Fixed 3.09% 3.11%
1 Year ARM 3.54% 3.53%
30 Year Fixed Jumbo 4.38% 4.38%
5/1 ARM 2.65% 2.69%
3/1 ARM 2.69% 2.69%
Rate data provided by Bankrate
Product Today Last Wk
60 Month Used Car Loan 4.51% 4.51%
48 Month Used Car Loan 4.35% 4.35%
48 Month New Car Loan 3.24% 3.24%
36 Month Used Car Loan 4.34% 4.36%
36 Month New Car Loan 3.11% 3.13%
60 Month New Car Loan 3.35% 3.34%
Rate data provided by Bankrate
Partner Links