The first cash flow in the future value of an annuity occurs when?
A)At the start of the first period.
B)At the maturity date of the loan.
C)When interest is collected.
D)At the end of the first period.

Question

Quizplus · Accepted Answer

The first cash flow in the future value of an annuity occurs at the end of the first period. An annuity is a series of equal payments made at equal intervals, and the future value of an annuity is the total value of all these payments plus the accumulated interest at a future point in time. Typically, the payments are made at the end of each period, which means the first cash flow will also occur at the end of the first period.

The First Cash Flow in the Future Value of an Annuity