An annuity in which the first cash flow is to occur after a time period that exceeds the time period between each subsequent cash flow is known as a/an:
A)deferred annuity.
B)growth annuity.
C)ordinary annuity.
D)annuity due.

Question

Quizplus · Accepted Answer

A deferred annuity is one in which the first cash flow is delayed or deferred for a period of time that is greater than the time period between each subsequent cash flow. This is in contrast to an ordinary annuity, in which the first cash flow occurs immediately or at the beginning of the annuity. The other options (B and D) are not applicable as they refer to different types of annuities.

An Annuity in Which the First Cash Flow Is to Occur