advance payment annuity

advance payment annuity

A regular payment made at the beginning of each month, year, or other period.It is relevant to real estate because many financial calculations,such as those possible in Microsoft Excel or on a financial calculator, require entry of different formulas depending on whether you are solving for an advance payment annuity (also called an annuity due) or an ordinary annuity.Any time you want to solve an equation that involves a payment received at the beginning of a period, such as rent, you use the format for advance payment annuity. Any time you want to solve an equation that involves a payment received at the end of a period, such as mortgage payments,you use the format for ordinary annuity.
The Complete Real Estate Encyclopedia by Denise L. Evans, JD & O. William Evans, JD. Copyright © 2007 by The McGraw-Hill Companies, Inc.
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