Annuity definition. Analyzing the definition of key terms often provides more insight about concepts. An annuity can be defined as – Series of equal payments at equal intervals. We considering the calculation of annuities we often consider the time value of money. For example, a mortgage loan often has equal payments, a portion of the payment allocated to interest and a portion of the payment allocated to principal. An annuity table can provide a better understanding of the relationships between the payment, interest, and principal.
