What is an annuity?

An annuity is defined as a uniform series of payments made at regular intervals over a specified period. This financial product involves either receiving or making a series of payments, typically used in contexts such as retirement savings or loan repayments. The term "uniform" indicates that the payments are consistent in amount and are spaced evenly over time, whether it's monthly, quarterly, or annually.

When considering other options, a one-time payment does not represent the concept of an annuity since it involves a single transaction rather than a series of transactions. A variable series of payments does not fit the definition of an annuity either, as this would imply that the payment amounts can change over time, which contradicts the premise of uniform payments. Additionally, a loan that accrues interest describes a different financial mechanism; while it may involve repayments over time, it does not specifically relate to the consistent payment structure that characterizes annuities. Thus, the definition of an annuity as a uniform series of payments is accurate and highlights the key features of this financial concept.