Annuity due

Definition

Annuity due in plain English

An annuity due is just an annuity (a stream of equal, regular payments) where each payment lands at the START of the period instead of the end. Think of rent: you pay for the month BEFORE you live in it, not after — that's payment-up-front timing. This small shift matters because money you receive sooner is worth a bit more (you can put it to work earlier), so an annuity due is always worth slightly more than the same payments made at each period's end. Same cash, better timing.

Related Principles of Finance terms

• Adjusted EBITDA
• Amortization
• Annuity
• Arithmetic mean return
• At the money (ATM)
• Binomial model
• Call option
• Compounding
• Continuous compounding
• Discounted cash flow (DCF)