Annuity (See Chapters 16 and 17 of the Vernimmen) An annuity is the cash paid out annually for debt reimbursement and interest accrued. A constant annuity means the part of the debt in each annual payment increases, but the interest part decreases, so that the total amount remains the same over the life of the loan. The value of a constant annuity can be calculated as follows: PV = F x [1/k – 1/(k x (1+k)n)], where F is the annuity, k – the discounting rate, n – duration of the investments. If the annuity grows with the constant rate g for n years, its value is then equal to: PV = F0 x [(1+g)/(k-g)] x [1 – (1+g)n/(1+k)n], where F0 is the first annuity. Annuity (See Chapters 16 and 17 of the Vernimmen) An annuity is the cash paid out annually for debt reimbursement and interest accrued. A constant annuity means the part of the debt in each annual payment increases, but the interest part decreases, so that the total amount remains the same over the life of the loan. The value of a constant annuity can be calculated as follows: PV = F x [1/k – 1/(k x (1+k)n)], where F is the annuity, k – the discounting rate, n – duration of the investments. If the annuity grows with the constant rate g for n years, its value is then equal to: PV = F0 x [(1+g)/(k-g)] x [1 – (1+g)n/(1+k)n], where F0 is the first annuity. See all terms in the dictionary of finance To know more about it, look at what we have already written on this subject :

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Definitions of terms begining with the same letter as "Annuity" :

ABS ADR ANAV APE APT APV Abandonment risk Accelerated book-building Accelerated depreciation Accelerated share repurchase Account balancing Accounting criteria of value creation Accounting currency risk Accounting procedures with an impact on earnings Accounts payable Accounts receivable Accretion Accruals Accrued expense Accrued income Acid test ratio Acquisitions Acquisitions Acquisitions Adjustable rate preference shares

Adjustable-rate debt security Adjusted Net Asset Value Adjusted present value, APV Administrative synergy Advance dividend Affirmative covenant Agency costs Agency theory Agent bank Agent fee Agreement in principle All-in cost All-share transaction Alliance Allocative efficiency Alpha Also called order book. Alternative management American Depositary Receipt American option Amortisation Amortisation of the loan Annual Premium Equivalent Annual effective interest rate Annuity

Annuity factor Apparent dilution Appraisal clause Arbitrage Arbitrage pricing theory, APT Arranger Arranging the deal Asset backed commercial paper Asset backed securities Asset beta Asset contribution Asset coverage Asset turnover Assets Associate Associated undertaking Asymmetry - option Asymmetry - shareholder / creditor Asymmetry – issuer/investor At the money Atypical silent partner Auction Auction clause Average life of a bond