Explore commonly used personal finance terms.
An annuity factor is a multiplier used in finance to determine the present value of an annuity based on the interest rate and time period. The factor helps calculate how much a series of future payments is worth today, aiding in financial planning for pensions, leases, and investments. Investors and financial analysts use annuity factors to compare the current value of different annuity options, ensuring that they meet income needs or investment goals over the required time frame.
