Concepts: Annuity: The annual or periodical payment for repayment of the capital amount invested on a property for a specified period is known as annuity. It is designed to help protect you from the risk of outliving your income. Amortization: A payment plan by which a loan is reduced through monthly payments of principal and interest. Depreciation: The monetary value of an asset decreases over time due to use, wear and tear or obsolescence. This decrease is measured as depreciation. Machinery, equipment, currency are some examples of assets that are likely to depreciate over a specific period of time. Obsolescence is the process of becoming obsolete or outdated and no longer used