All of the following are conditions for an annuity due except ________.
A)the interest rate is constant for each time period
B)interest is compounded at the end of each time period
C)the time periods between the cash flows are the same length
D)periodic cash flows must be equal in amount

Question

Quizplus · Accepted Answer

The conditions for an annuity due include equal periodic cash flows, constant interest rate, and equal time periods between cash flows. The only condition that is not true for an annuity due is that interest is compounded at the end of each time period. In an annuity due, interest is compounded at the beginning of each time period.

All of the Following Are Conditions for an Annuity Due