Which of the Following Is True of Annuities

question 38

Multiple Choice

Which of the following is true of annuities?

• A) An ordinary annuity is an equal payment paid or received at the beginning of each period.
• B) An annuity due is a payment paid or received at the beginning of each period that increases by an equal amount each period.
• C) An annuity due is an equal stream of cash flows is paid or received at the beginning of each period.
• D) An ordinary annuity is an equal payment paid or received at the end of each period that increases by an equal amount each period.