The future amount of an annuity due is determined
A) one period after the last cash flow in the series.
B) one period before the last cash flow in the series.
C) at the same time as the last cash flow in the series.
D) one period after the next cash flow in the series.

Question

Quizplus · Accepted Answer

The future amount of an annuity due is determined one period after the last cash flow in the series because, in an annuity due, payments are made at the beginning of each period, and the future value accumulates interest for one additional period after the last payment.

The Future Amount of an Annuity Due Is Determined