Period Of Deferral Of A Deferred Annuity

Annuity

a sequence of payments made at equal intervals or periods of time.

Annuity Immediate or Ordinary Annuity

a type of annuity in which the payments are made at the end of each period.

Deferred Annuity

an annuity that does not begin until a given time interval has passed.

Period of Deferral

time between the purchase of an annuity and the start of the payments for the deferred annuity.

Biennially

once every two years (0.5).

Annually

once a year (1).

Semi-annually

twice a year (2).

Quarterly

four times a year (4).

Monthly

once a month (12).

Weekly

once a week (52).

Daily

a day (365).

“Made”

implies that the payment is paid at the end of the period. It behaves like an ordinary annuity where the payment occurs at the conclusion of the specified timeframe.

“Due”

signals an annuity due. The payment occurs at the beginning of a period. At time n, the payment becomes payable immediately, meaning it behaves like an annuity due.

Annuity Due

an annuity where payments are made at the beginning of each period.

Ordinary Annuity

an annuity where payments are made at the end of each period.

Period of Deferral Formula (k = nt − 1)

used when the first payment is made or due after a specified period and the deferral period is counted before the first payment.

Period of Deferral Formula (k = nt)

used when determining the number of deferral periods based on the given time interval.

k

period of deferral.

n

number of times compounded per year.

t

time or number of years.