A stream of equal cash payments made at equal time intervals is called a(n)________.
A) present value
B) annuity
C) compound interest
D) future value

Question

Quizplus · Accepted Answer

An annuity is a stream of equal cash payments made at equal time intervals (such as monthly or yearly), making it the best choice among the given options. Present value is the current worth of a future cash flow, future value is the value of an investment at a future date, and compound interest is the interest calculated on not only the original principal but also on the accumulated interest from previous periods. These options do not fully represent a stream of equal cash payments made at equal time intervals.

A Stream of Equal Cash Payments Made at Equal Time