What is per annum?

Per Annum (p.a.)

"Per annum" is a Latin term meaning "by the year" or "each year". It's commonly used in financial and economic contexts to express rates or values over a one-year period.

• Usage: It clarifies the time frame to which a rate or value applies. For example, an <a href="https://www.wikiwhat.page/kavramlar/interest%20rate">interest rate</a> of 5% per annum means the interest is calculated and applied over a year.

• Contexts:

  • <a href="https://www.wikiwhat.page/kavramlar/Finance">Finance</a>: Used extensively for interest rates on <a href="https://www.wikiwhat.page/kavramlar/loans">loans</a>, <a href="https://www.wikiwhat.page/kavramlar/investments">investments</a>, and savings accounts.
  • <a href="https://www.wikiwhat.page/kavramlar/Economics">Economics</a>: Used to express <a href="https://www.wikiwhat.page/kavramlar/economic%20growth">economic growth</a> rates, <a href="https://www.wikiwhat.page/kavramlar/inflation">inflation</a> rates, and other annual metrics.
  • Salaries: Sometimes used when discussing <a href="https://www.wikiwhat.page/kavramlar/salary">salary</a> or compensation.

• Importance: Using "per annum" ensures clarity and avoids ambiguity. It provides a standard timeframe for comparison. Without it, a 5% rate could be interpreted over a month, quarter, or longer period, drastically altering its actual impact.