All of the following are conditions for an ordinary annuity due except
A) periodic cash flows must be equal in amount.
B) the time periods between the cash flows are the same length.
C) the future value is equal to the present value.
D) interest is compounded at the end of each time period.

Question

Quizplus · Accepted Answer

An ordinary annuity due involves payments at the beginning of each period, not the end, and its future value is not equal to its present value. The future value is calculated based on the present value, interest rate, and number of periods, and it is typically higher than the present value due to the accumulation of interest.

All of the Following Are Conditions for an Ordinary Annuity