Assuming Equal Time Intervals Between the Payments and a Constant $\begin{array}{lllllllll}\text { Year } 1& \text { Year } 2& \text { Year } 3 & \text { Year }4& \text { Year } 5 & \text { Year } 6\end{array}$

question 24

Multiple Choice

Assuming equal time intervals between the payments and a constant rate of return,which of the following cash flow patterns represents an annuity? $\begin{array}{lllllllll}\text { Year } 1& \text { Year } 2& \text { Year } 3 & \text { Year }4& \text { Year } 5 & \text { Year } 6\end{array}$
A. $\begin{array}{lllllllll}\$ 1,000 & \$ 1,000 & \$ 1,000 & \$ 1,000 & \$ 1,000 & \$ 1,000\end{array}$
B. $\begin{array}{llllllll}\$ 500 & &&\$ 0 &&& \$ 500 & &\$ 500&& \$ 500 && \$0\end{array}$
C. $\begin{array}{llllllll}\$ 100 &&& \$ 200 && \$ 300 && \$ 400 && \$500&&\$600\end{array}$

• A) A
• B) B
• C) C
• D) Any of the answers can represent an annuity.

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Definitions:

Large Databases

Vast collections of data organized for rapid search and retrieval by a computer, often used in business for storing critical information.

Systematic Investigation

A structured and methodical approach to research or study to gather information and answer questions.

System

A set of interrelated components working together to achieve a common goal or function.

Contingency

An event or condition that is possible but cannot be predicted with certainty.