Another use of the word arrears occurs with annuities. (An annuity is a series of equal amounts occurring at equal time intervals...such as $1,000 per month for 20 years.) If the recurring amount comes at the end of each period, the annuity is described as an annuity in arrears or as an ordinary annuity. A loan repayment schedule is usually an annuity in arrears. For example, you borrow $10,000 on September 30 and your first monthly payment will be due on October 31, the second payment will be due on November 30, and so on.
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