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Annuity factor

Updated: Aug 20, 2021

The factor that converts a lump sum into a payment per period that is payable for a specified period of time. The inverse is the annuity rate, which determines the present value of a set of payments of unit value per period. Common usage often mentions annuity rate when, in fact, referring to the annuity factor. See also annuity.

Reference: Oxford Press Dictonary of Economics, 5th edt.

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