Some examples of business transactions that form an annuity include:
- The equal amounts of interest paid every six months by the issuer of debt securities known as bonds.
- The monthly payments required by a lease agreement for equipment or a vehicle.
- The annual payments required by a purchase agreement.
Depending on the starting point of the first payment, an annuity will be further identified as an ordinary annuity, an annuity in advance, a deferred annuity, etc.
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