When the present value of an annuity is calculated as of two or more periods before the payment of the first cash flow,the annuity is ________.
A)an ordinary annuity
B)a future annuity
C)an annuity due
D)a deferred annuity

Question

Quizplus · Accepted Answer

When the present value of an annuity is calculated as of two or more periods before the payment of the first cash flow, it is referred to as a deferred annuity. This is because the payments are deferred or postponed until a later date. The other options do not accurately describe this scenario. An ordinary annuity has payments that begin at the end of the period, whereas an annuity due has payments that begin at the beginning of the period. A future annuity is not a commonly used term in finance.

When the Present Value of an Annuity Is Calculated as of Two