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ordinary annuity

   Also found in: Dictionary/thesaurus, Acronyms 0.01 sec.
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.



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