What Does Per Annum Mean and How Is It Different from Other Time Periods?

During the interaction with financial documents in your day-to-day life, you surely have come across a formal and repetitive term, per annum. Well, it is a Latin term that translates to per year, “annually,” or “once a year” in English.

To help you understand the meaning of per annum in depth, we have elaborated a detailed guide that breaks down the meaning, usage, comparison with other time periods, and more. 

Meaning of Annum 

Before understanding the Per annum meaning, understanding what annum means is fundamental. The term annum is derived from the Latin word ‘annus,’ which means ‘year.’ This word is commonly used in business and financial contexts to describe the salaries and other relevant financial figures that are calculated or offered on an annual basis.

Let us understand with the help of an example: 

Suppose someone earns a salary of $60,000 each year; that means they are rewarded with this amount on a yearly basis. 

So whether you are reviewing a job offer, planning to opt for a loan, managing investments, or understanding what annum means helps you make informed financial decisions and avoid confusion about payment periods, interest calculations, and more. 

What does Per Annum Mean?

Now that you have understood the meaning of annum, let’s move forward to decode the per annum existence. Per annum means “once a year,” “annual,” or “a 12-month period.” It’s a standardized period for financial calculations for a better comparison, reporting, and decision-making process. 

Moreover, it is known as the AER, which stands for annual equivalent rate calculated annually or over a period of 12 months. 

Usage Examples of Per Annum

Below are some examples that help understand the usage of the term per annum in finance, business documents, or general conversation. 

• Example: The CCN bank offers an interest rate of 7% per annum on savings accounts. 
• Description 

The above example means that the bank offers an interest rate of 7% which is calculated yearly. Your savings will earn 7% of the balance every year. 

• Example: We are offering a salary of $70,000 per annum for the content strategist position. 
• Description: In the above example, per annum defines that the employee will earn $70,000 as the annual earnings. 

• Example: The last 5-year data report says that the investment fund has delivered an average return of 9% per annum.
• Description: In the above example, 9% refers to the average annual growth of the investment

• Example: You are required to pay an amount of $1,200 per annum for your car insurance.
• Description: The above example means that the car owner has to pay an insurance amount of $1,200 every 12 months. 

Difference Between Annum and Per Annum

Let’s see how we can differentiate the concepts of annum and per annum with detailed differences. 

Aspect	Annum	Per Annum
Meaning	Year	Each year or for each year
Definition	Annum stands for the time unit, referring to one year.	A rate of expression meaning per year.
Origin	Derived from the Latin word “annus”	Derived from the Latin words per (throughout, by) and annus (year)
Context of Use	Used when referring to the duration or passage of a year.	Used mainly in financial, economic, legal, and business contexts to indicate something calculated or paid yearly.
Examples	The contract is renewed every annum. The report is made once per year.	The company offers a hike of 10% per annum. Your salary package is $6,000 per annum.
Same Phrases	Year, Yearly, Annually	Per Year, Annually, Each Year

How Does Per Annum Differ from Other Time Periods?

For a better understanding, we have outlined the comparison of per annum with other commonly used time periods in day-to-day life. 

Per Annum Vs. Per Month 

In general, per annum is used to state an annual earning. On the other hand, per month refers to the payments typically made once a month. 

Per Annum Vs. Per Hour 

Per annum is an annual amount that is the sum of the annual earnings. While per hour describes the hourly payments for the number of hours worked in a day or week.

Per Annum Vs. Per Week

Per annum refers to a period of 365 days (366 in a leap year), and per week calculates the rate for a 7-day period.

Per Annum Vs. Per Bi-Annum 

Per Annum refers to something that is calculated yearly or once a year. Whereas Per Bi-Annum means twice a year, or a calculation done every six months.

Conclusion

In a nutshell, per annum simply means “each year” or “annually.” Per annum clearly indicates yearly amounts such as salaries, interest rates, fees, financial figures, and more. By understanding this simple concept, you can better make use of this term in both personal and professional settings. 

I hope by reading the whole blog, you can now differentiate whether a figure applies monthly, quarterly, or annually.