Which of the following refers to the annual periodic payments made for the repayment of the capital invested?

Explanation:

Annuity

• Refers to a series of equal annual payments made at regular intervals.

• It is typically used for repaying loans, capital investments, or mortgages.

• Each payment includes interest on the remaining balance and a portion of the principal.

 Additional Information

Sinking Fund:

• A fund set aside regularly to accumulate a certain amount for future replacement or repayment of a debt.

• Payments made are invested, and interest earned helps reach the target amount.

• Unlike an annuity, it doesn't directly represent the repayment of capital through fixed annual payments.

Depreciation:

• The reduction in the value of an asset over time due to wear and tear, obsolescence, or usage.

• It is not a payment but an accounting process to allocate cost over asset life.

Solatium:

• A compensation payment for emotional or non-material damage, often in land acquisition or legal contexts.