Frequently Asked Questions (FAQ)
What is the difference between Ordinary Annuity and Annuity Due?
Annuity Due (Start of Period/Advance): Payment is made at the start of the period. Since the payment reduces the principal sooner, interest is calculated on a smaller amount, usually resulting in a lower total interest expense.
Ordinary Annuity (End of Period/Arrears): Payment is made at the end of the period. Interest accrues on the full opening balance before the payment is made.
What is the 'Initial Lease Liability / Present Value'?
This is the present value of all your future payments discounted back to the start date using the annual interest rate you provided. For a lease, this is the initial lease liability/present value. For a lease, this is your initial borrowed amount.