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Annuity factor |
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Definition of Annuity factorAnnuity factorPresent value of $1 paid for each of t periods. annuity factorPresent value of an annuity of $1 per period.
Related Terms:ADF (annuity discount factor)the present value of a finite stream of cash flows for every beginning $1 of cash flow. PPF (periodic perpetuity factor)a generalization formula invented by Abrams that is the present value of regular but noncontiguous cash flows that have constant growth to perpetuity. Amortization factorThe pool factor implied by the scheduled amortization assuming no prepayemts. AnnuityA regular periodic payment made by an insurance company to a policyholder for a specified period Annuity dueAn annuity with n payments, wherein the first payment is made at time t = 0 and the last Annuity in arrearsAn annuity with a first payment on full period hence, rather than immediately. Conversion factorsRules set by the Chicago Board of Trade for determining the invoice price of each Deferred nominal life annuityA monthly fixed-dollar payment beginning at retirement age. It is nominal Discount factorPresent value of $1 received at a stated future date. Equivalent annual annuityThe equivalent amount per year for some number of years that has a present FactorA financial institution that buys a firm's accounts receivables and collects the debt. Factor analysisA statistical procedure that seeks to explain a certain phenomenon, such as the return on a Factor modelA way of decomposing the factors that influence a security's rate of return into common and Factor portfolioA well-diversified portfolio constructed to have a beta of 1.0 on one factor and a beta of FactoringSale of a firm's accounts receivable to a financial institution known as a factor. Maturity factoringfactoring arrangement that provides collection and insurance of accounts receivable. Multifactor CAPMA version of the capital asset pricing model derived by Merton that includes extramarket Net benefit to leverage factorA linear approximation of a factor, T*, that enables one to operationalize the Normal annuity formThe manner in which retirement benefits are paid out. Old-line factoringfactoring arrangement that provides collection, insurance, and finance for accounts receivable. One-factor APTA special case of the arbitrage pricing theory that is derived from the one-factor model by Pool factorThe outstanding principal balance divided by the original principal balance with the result Present value factorfactor used to calculate an estimate of the present value of an amount to be received in RAMs (Reverse-annuity mortgages)Mortgages in which the bank makes a loan for an amount equal to a Reported factorThe pool factor as reported by the bond buyer for a given amortization period. Single factor modelA model of security returns that acknowledges only one common factor. Single-premium deferred annuityAn insurance policy bought by the sponsor of a pension plan for a single Two-factor modelBlack's zero-beta version of the capital asset pricing model. Limiting factorThe production resource that, as a result of scarce resources, limits the production of goods AnnuityA series of payments or deposits of equal size spaced evenly over Annuity Dueannuity where the payments are to be made at the beginning of Ordinary AnnuityAn annuity where the payments are made at the end of each annuity duea series of equal cash flows being received or paid at the beginning of a period critical success factors (CSF)any item (such as quality, customer ordinary annuitya series of equal cash flows being received AnnuityA series of payments over a period of time. The payments are usually FactoringThe sale of accounts receivable to a third party, with the third party bearing Factory overheadAll the costs incurred during the manufacturing process, minus the annuityEqually spaced level stream of cash flows. annuity dueLevel stream of cash flows starting immediately. discount factorPresent value of a $1 future payment. Factor of ProductionA resource used to produce a good or service. The main macroeconomic factors of production are capital and labor. Individual Retirement AnnuityAn IRA comprised of an annuity that is managed FactoringThe discounting, or sale at a discount, of receivables on a nonrecourse, notification Scrap factorAn anticipated loss percentage included in the bill of material and Shrinkage factorThe expected loss of some proportion of an item during the AnnuityA contract which provides an income for a specified period of time, such as a certain number of years or for life. An annuity is like a life insurance policy in reverse. The purchaser gives the life insurance company a lump sum of money and the life insurance company pays the purchaser a regular income, usually monthly. Back To Back AnnuityThis term refers to the simultaneous issue of a life annuity with a non-guaranteed period and a guaranteed life insurance policy [usually whole life or term to 100]. The face value of the life insurance would be the same amount that was used to purchase the annuity. This combination of life annuity providing the highest payout of all types of annuities, along with a guaranteed life insurance policy allowed an uninsurable person to convert his/her RRSP into the best choice of annuity and guarantee that upon his/her death, the full value of the annuity would be paid tax free through the life insurance policy to his family members. However, in the early 1990's, the Federal tax authorities put a stop to the issuing of standard life rates to rated or uninsurable applicants. Insuring a life annuity in this manner is still an excellent way to provide guaranteed tax free funds to family members but the application for the annuity and the application for the life insurance are separate transactions and today, most likely conducted through two different insurance companies so that there is no suspicion of preferential treatment given to the life insurance application. Deferred AnnuityAn annuity providing for income payments to commence at a specified future time. FactorAn agent who buys and sells goods on behalf of others for a commission. FactoringType of financial service whereby a firm sells or transfers title to its accounts receivable to a factoring company, which then acts as principal, not as agent. Interest FactorNumbers found in compound interest and annuity tables. Usually called the FVIF or PVIF. AnnuityPeriodic payments made to an individual under the terms of the policy. Annuity PeriodThe time between each payment under an annuity. Guaranteed Interest Annuity (GIA)Interest bearing investment with fixed rate and term. Variable AnnuityA form of annuity policy under which the amount of each benefit is not guaranteed or specified. The amounts fluctuate according to the earnings of a separate investment account.
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