Per annum is used in financial contexts to mean for each year. As kiamlaluno says, per annum is traditionally used more in financial contexts than per year, but these sentences show that per year is also perfectly acceptable. All content on this website, including dictionary, thesaurus, literature, geography, and other reference data is for informational purposes only. This information should not be considered complete, up to date, and is not intended to be used in place of a visit, consultation, or advice of a legal, medical, or any other professional.
- This means that you earn interest on money you deposit as well as any interest you’ve previously earned.
- The amount of interest you earn will depend on whether it’s simple or compound interest.
- For accounts that only use simple interest, you would only earn interest on the money you pay in, but not any previous interest.
- You will often have to pay interest on things like loans, credit cards and mortgages.
Find out more about how interest rates work on savings accounts. The amount of interest you earn will depend on whether it’s simple or compound interest. This means that you earn interest on money you deposit as well as any interest you’ve pros and cons of the six sigma methodology previously earned. While you can earn interest on your savings, if you borrow money then you may have to pay interest on top of what you borrow. You will often have to pay interest on things like loans, credit cards and mortgages.
Examples of Per Annum
For accounts that only use simple interest, you would only earn interest on the money you pay in, but not any previous interest. When you earn interest on your savings, it is usually calculated daily and then paid either monthly or per annum (annually). To compute the rate per annum we restate the amounts by multiplying both the “2%” and the “20 days” by 18 (in order to get close to the 365 days in a year). An example involves a supplier offering a credit customer an early-payment discount of 2% for paying an invoice in 10 days instead of paying the full amount in 30 days. In this example the supplier is giving up 2% of the invoice amount in order to be paid 20 days early. It is a common phrase used to describe an interest rate.
Often “per annum” is omitted, as in “I have a 4% mortgage loan.” or “This bond pays interest of 6%.” Stack Exchange network consists of 183 Q&A communities including Stack Overflow, the largest, most trusted online community for developers to learn, share their knowledge, and build their careers. Find out more about how interest rates work on borrowing products. Even though the interest may be calculated on a per annum basis, it may be paid to you monthly. Another example involves a business charging its customers 1.5% per month on any past due balance. The monthly rate of 1.5% can be converted to 18% per annum by multiplying the 1.5% times 12 months in a year.