All of the following are conditions for an 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 interest rate is constant for each time period.
D) interest is compounded at the end of each time period.

Question

Quizplus · Accepted Answer

In an annuity due, payments are made at the beginning of each period, not at the end, which contradicts the compounding of interest at the end of each period as stated in option D.

All of the Following Are Conditions for an Annuity Due