The most important thing to note about an annuity is
A)that the payment must not change over time.
B)that the payment increases according to the discount rate.
C)it reflects the growth of a single lump sum.
D)that it reflects the power of simple interest.

Question

Quizplus · Accepted Answer

An annuity is a fixed payment received at regular intervals for a specified period or for the rest of a person's life. The most important thing to note about an annuity is that the payment must not change over time, hence option A is correct. Option B is incorrect because an annuity does not increase according to the discount rate, but rather reflects a fixed payment. Option C is partially correct, as an annuity reflects the growth of a single lump sum, but this is not the most important thing to note about it. Option D is incorrect because an annuity reflects the power of compound interest, not simple interest.

The Most Important Thing to Note About an Annuity Is