# ordinary annuity

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Related to Ordinary Annuities: Annuity due

## Ordinary Annuity

An annuity with payments that are made at the end, rather than at the beginning, of a period. For example, an ordinary annuity may require payments at the end of the month instead of at the beginning. Many credit cards have ordinary annuity payments, while most lease agreements, for example, do not.

## ordinary annuity

An annuity that makes payments at the end of each period. Compare annuity due.

## ordinary annuity

A series of equal payments, made at the end of each payment period. Contrast with annuity due, which is a series of equal payments made at the beginning of each period. A mortgage payment is an ordinary annuity, because the payment is made after a month's worth of interest has accrued. Rent payments are annuities due, because payment is made in advance at the beginning of each month. The difference is important for proper formula entries in financial calculators, or for Excel, as the formula is slightly different if the payments are ordinary annuities or annuities due.

References in periodicals archive ?
In contrast with ordinary annuities, the final partial payment for annuities due is not assumed to be paid at the very end of the non-integer number of periods, but rather at the beginning of the final partial period.
The formulas for computing the future value of inflation-adjusted annuities due and ordinary annuities can be derived by similar manipulations and adjustments of equations FV2 and FV4 (from Chapter 32).
In several instances, total dividends paid out in 2003 were less than the combined totals for ordinary life and ordinary annuities.
Table 4 shows that for the output classes ordinary annuities ([q.

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