# Annuity factor

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## Annuity factor

Present value of \$1 paid for each of t periods.

## Annuity Factor

The calculation of the present value of a cash flow or other income stream that produces \$1 in income over so many periods of time.
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"While DB participants face actuarially fair annuities, DC participants have to buy annuities on the open market where marketing and other costs reduce annuity factors [which determine payment amounts] by about 15 to 20%," the report states.
This subsection provides the numerical analysis of how the parameters of interest rate model impacts the annuity A, the lump sum [??], and the annuity factors [[??].sub.i] = 1,2; again, we keep the other parametric values fixed.
Finally, we divide the annualized payouts into \$100,000 to get the annuity prices per \$1 of payout per year (henceforth alternately referred to as "annuity prices" or "annuity factors").
Column 4 shows the force-of-mortality probabilities that we derived, (263) and Columns 5 and 6 show the uniform and inflation-adjusted monthly annuity factors that we derived for the first month of each year starting with age 65.
(1) Find the single life annuity factor for a person age eighty-five at a 3 percent interest rate--5.3605 (from the Tax Facts Single Life Annuity Factors Table in Tax Facts Appendix C).
(1) Find the single life annuity factor for a person age 70 at a 5.2% rate of return--9.1808 (from Single Life Annuity Factors Table in Appendix C).
* If the benefit base, as opposed to the account value, is applied to purchase the guaranteed minimum lifetime income, the annuity factors used may include what are called age setbacks.
Because the annuity factors from Table B are based on the assumption annuity payments will be made once a year at the end of the year, these factors must be adjusted when payments are more frequently and/or at the beginning of each payment period.
The table accompanying "Present Value of an Annuity" provides annuity factors from one to thirty years, for sample rates between 5% and 20%.
The lump sum could be converted into retirement income of 25 percent to 30 percent of final average pay, depending on annuity factors. This is well within competitive bounds.
We start the numerical analysis of how the parameters of the house price model impacts the annuity, lump sum, and annuity factors, while we keep fixed the other parametric values given above.
Current pooling arrangements include new annuity factors based on the mortality experience as it is realized.
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