The value of property or structures become less by its

becoming out of date in style, in structure in design, etc., and this is

termed as Obsolescence. An old dated building with massive walls,
arrangements of rooms not suited in present days and for similar
reasons, becomes obsolete even if it is maintained in a very good
condition, and its values becomes less due to obsolescence. The
obsolescence may be due to the reasons such as progress in arts,
changes in fashions, changes in planning ideas, new inventions,
improvements in design technique, etc., A machine of old design may
become obsolete, though it may be in good running condition and its
value will be less. Thus, though the property is physically sound, it
may become functionally inadequate and its economical return
becomes less.
Annuity: Annuity is the annual periodic payments for repayments of
the capital amount invested by a party. These annual payments are
either paid at the end of the year or at the beginning of the year,
usually for a specified number of years.
If the amount of annuity is paid for a definite number of periods or
years, it is known as Annuity certain. In such cases the amount of
annuity will be higher, the lesser the number of the years the higher
will be the amount and vice versa to clear up to the whole amount of
capital.
If the amount of annuity is paid at the beginning of each period of year
and payments continued for definite number of periods, it is known as
Annuity due.
If the payment of annuity begins at some future date after a number
of years, this is known as Deffered Annuity.