In Comparing an Ordinary Annuity and an Annuity Due, Which

question 57

Multiple Choice

In comparing an ordinary annuity and an annuity due, which of the following is true?

• A) The future value of an annuity due is always less than the future value of an otherwise identical ordinary annuity, since one less payment is received with an annuity due.
• B) All things being equal, one would prefer to receive an ordinary annuity compared to an annuity due.
• C) The future value of an annuity due is always greater than the future value of an otherwise identical ordinary annuity.
• D) The future value of an ordinary annuity is always greater than the future value of an otherwise identical annuity due.

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Definitions:

Multi-Directional Development

The concept that human development occurs in different directions and not in a linear fashion, showing gains and losses across the lifespan.

Continuity

The principle or quality of maintaining a consistent state or operation over time, often considered in contexts such as development, history, or processes.

Tortoise

refers to a terrestrial turtle, typically with a dome-shaped shell, known for its slow movement and long lifespan.

Developmental Perspective

An approach in psychology and other disciplines that focuses on how individuals grow and change throughout their lifespan, including physical, cognitive, and social development.