The main difference between an annuity and an annuity due lies in the:
A) number of payments.
B) time of the first payment.
C) interest rate.
D) frequency of payments.

Question

Quizplus · Accepted Answer

The main difference between an annuity and an annuity due is the timing of the first payment. In an ordinary annuity, the first payment is made at the end of the period (whether it is a year, a month or some other time period), while in an annuity due the first payment is made at the beginning of the period. This small difference can have a big impact on the total amount of money paid or received over the life of the annuity.

The Main Difference Between an Annuity and an Annuity Due