Which of the following is true of annuities?
A) An ordinary annuity is an equal payment paid or received at the beginning of each period.
B) An annuity due is a payment paid or received at the beginning of each period that increases by an equal amount each period.
C) An annuity due is an equal stream of cash flows is paid or received at the beginning of each period.
D) An ordinary annuity is an equal payment paid or received at the end of each period that increases by an equal amount each period.

Question

Quizplus · Accepted Answer

An annuity due is characterized by payments that occur at the beginning of each period, and these payments are of equal amounts, not increasing with each period.

Which of the Following Is True of Annuities