ANNUAL INSTALLMENT Meaning and
Definition
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Annual installment refers to a fixed sum of money or a payment made towards a specific obligation or debt that is divided into equal parts and paid over a period of one year. This form of payment arrangement is commonly utilized for larger financial commitments such as mortgages, loans, or insurance premiums.
An annual installment plan allows the borrower or policyholder to make regular and predictable payments towards the total amount owed or the cost of the coverage. The amount of each installment is determined based on factors such as the principal amount, the interest rate, and the agreed-upon repayment period. The total payment is then divided evenly across the duration of one year.
These installments help individuals or organizations to manage their financial obligations more effectively, as the payment amounts are spread out over the course of the year, rather than requiring a lump sum payment. This arrangement minimizes the potential burden on the debtor's finances, making it easier to budget and fulfill their repayment obligations.
Annual installments are often accompanied by a schedule that outlines the specific payment amounts and due dates for each installment. By adhering to this schedule, the borrower or policyholder can ensure timely payments and maintain a good standing with the lender or insurance provider.
In summary, an annual installment refers to a fixed sum of money paid over a span of a year towards the settlement of a debt or an insurance premium, facilitating better financial planning and management for the payer.
Common Misspellings for ANNUAL INSTALLMENT
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Etymology of ANNUAL INSTALLMENT
The word "annual" originated from the Latin word "annuālis", derived from "annus" meaning "year". It entered the English language in the early 14th century with the same meaning of "occurring once a year".
Meanwhile, the term "installment" has a more complex etymology. It comes from the Latin word "installāre", meaning "to put in a certain place" or "to place in office". Throughout history, it acquired the sense of "appointing someone to office" or "investing someone with authority", until it eventually shifted to refer to the "payment of a debt in portions over a period". This meaning originated in the late 16th century, influenced by the earlier sense of gradually "installing" someone into a position.
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