Life annuitys are periodic payments until the end of the recipient's life. They are bound on the life expectancy of the
pensioner. They are purchased by one-time payments (eg sale of a house
on annuity) or ongoing contributions (deferred annuity). Basis for the
calculation of life annuities are life tables. (Vital statistics of the
population of a country).
A typical example of the life annuity is the sale of a house. The
purchase agreement is, that the buy price is payed only partially (or
not at all). Instead of paying immediately, the buyer has to pay a
certain ammount as a peridoic annuity until the death of the seller.
Instructions for using the life annuity calculator:
Present value: The present value is the
amount, wich should be used for the life annuity, for example, the
proceeds of sale or an accumulated amount of money. You can calculate
the life annuity, if the present value is known or you can calculate the present value,
if the life anniuty is known.
Interest Rate: Enter the agreed interest rate in the appropriate field.
Payment period: Select the payment period of the life annuity.
Life annuity: If you have entered the
present value, the life annuity is calculated. If you would like to
know, what present value is needed to recive a certain life annuity,
enter the desidered life annuity an calculate the needed present value.
Advanced options: (not necessarily needed)
Payable: Choose, whether the pension will be disbursed at the beginning or at the end of a period.
Deferred annuity: Determine whether the payment of the life annuity is deferred for a certain time.
Temporary annuity: Determine whether the life annuity should be paid only for a certain period .
Calculate: Click on 'Calculate' to calculate the life annuity.
Delete entries: deletes all entries.