# Annuity factor

## 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.
References in periodicals archive ?
The annuity factor used is the discounted present value of payments and does not include the risk premium for the life annuity.
The monthly payout of any actuarially fair annuity is simply equal to the account balance divided by a monthly annuity factor. The monthly annuity factor is the premium for an actuarially fair annuity that pays \$1 per month for life.
Find the single life annuity factor for a fifteen year annuity at a 1.4 percent interest rate--13.4453 (from the Annuity, Income, and Remainder Interests for a Term Certain Table in Appendix C).
The gift reportable for tax purposes is fixed, given the fair market value of the gift and the applicable annuity factor (combining term, Section 7520 rate and retained annuity).
C in Tax Facts on Investments for selected unitrust tables.] Both the single life and term certain tables provide factors for remainder interests that can be converted into an income factor or an annuity factor. A remainder interest is converted into an income factor by subtracting the remainder factor from 1.
(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).
Under the fixed annuity factor method, the annual payment is determined by dividing the account balance by an annuity factor calculated using the mortality table in Rev.
AF= annuity factor = [(1 + i).sup.RL] -1/[(1 + i).sup.RL] x i
Taxpayers can use an annuity factor derived from the IRS tables for their life expectancy or the joint life expectancy with their beneficiary.
7520 Rate: 6.0% Fair Market Value: \$50,000 Adjusted Basis: \$10,000 Annuity Payment: \$50,000 x 6.5% = \$3,250 Annuity Factor: 8.4988 Annuity Adj.
The calculation of the value of the taxable gift is as follows: Annuity factor for calculating the remainder factor.
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