Ordinary Annuity
Definition of "Ordinary annuity"
Same as term annuity: Equal period payments or receipts. Examples of an annuity are annual rental receipts from a real estate investment and cash dividends from a real estate firm's preferred stock. There are two types of an annuity. They are an ordinary annuity, where payments or receipts occur at the end of the period; and an annuity due, where payments or receipts are made at the beginning of the period.
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The term annuity due is a contract that demands payment at the beginning of each period. The most common example of an annuity due in real estate is rent when we consider that most ...
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