Annuity

he term annuity is used in finance theory to refer to any terminating stream of fixed payments
over a specified period of time. This usage is most commonly seen in discussions of finance,
usually in connection with the valuation of the stream of payments, taking into account time value
of money concepts such as interest rate and future value.[1]

Examples of annuities are regular deposits to a savings account, monthly home mortgage
payments and monthly insurance payments.[2]Annuities are classified by payment dates. The
payments (deposits) may be made weekly, monthly, quarterly, yearly, or at any other interval of
time.

Ordinary annuity
An ordinary annuity (also referred as annuity-immediate) is an annuity whose payments are
made at the end of each period (e.g. a month, a year).

Annuity-due
An annuity-due is an annuity whose payments are made at the beginning of each period.
[4]
Deposits in savings, rent or lease payments, and insurance premiums are examples of
annuities due

Amortization
Amortization (or amortisation) is the process of decreasing, or accounting for, an amount over
a period. The word comes from Middle English amortisen to kill, alienate in mortmain, from Anglo-
French amorteser, alteration of amortir, from Vulgar Latin admortire to kill, from Latin ad- + mort-,
mors death.

When used in the context of a home purchase, amortization is the process by which your loan
principal decreases over the life of your loan. With each mortgage payment that you make, a
portion of your payment is applied towards reducing your principal and another portion of your
payment is applied towards paying the interest on the loan. An Amortization table shows this ratio
of principal and interest and demonstrates how your loan's principal amount decreases over time.

Amortization is generally known as depreciation of tangible assets of a firm.