The future value of an ordinary annuity assumes that the payments are received
A) at the beginning of the year and the last payment does not compound.
B) at the end of the year and the last payment does not compound.
C) at the beginning of the year and the last payment is compounded.
D) at the end of the year and the last payment is compounded.

Question

Quizplus · Accepted Answer

The future value of an ordinary annuity assumes that payments are made at the end of each period (e.g., year), and since the last payment is made at the end of the last period, it does not have time to earn interest or compound within the annuity's timeframe.

The Future Value of an Ordinary Annuity Assumes That the Payments