What does "in advance" mean in the context of payments?

In the context of payments, "in advance" refers to payments that are made at the beginning of each time period. This means that the payment is completed prior to the delivery of a service or the receipt of a product. For example, in a lease agreement, paying "in advance" would mean that you pay the rent for the upcoming month on or before the first day of that month. This practice ensures that the vendor or service provider is compensated before they fulfill their obligation, providing a level of security to both parties involved.

In the other choices, the concepts differ significantly from the definition of "in advance." Payments made after the due date indicate a delay and a breach of the agreed payment terms. Payments made in a lump sum suggest a single, one-time payment rather than a recurring payment at the start of a period. Lastly, payments made in installments typically involve a series of payments spread over time rather than an upfront payment at the beginning of a period. Consequently, the choice indicating payments made at the beginning of each time period accurately captures the essence of what "in advance" signifies in this context.