When determining the future value of an annuity, cash flows are presumed to occur
A)at the start of the first period.
B)at the end of the first period.
C)when the interest is received.
D)at the maturity date.

Question

Quizplus · Accepted Answer

When determining the future value of an annuity, cash flows are generally presumed to occur at the end of the period. This is known as an ordinary annuity. However, if the cash flows occur at the beginning of each period, it is known as an annuity due.

When Determining the Future Value of an Annuity, Cash Flows