Which of these answers best describes an ordinary annuity?
A)A series of equally sized regularly occurring cash flows extending n periods into the future,with the cash flows occurring at the end of each period
B)A series of equally sized regularly occurring cash flows extending n periods into the future,with the cash flows occurring at the start of each period
C)A series of equally sized regularly occurring cash flows extending indefinitely into the future,with the cash flows occurring at the start of each period
D)A series of equally sized regularly occurring cash flows extending indefinitely into the future,with the cash flows occurring at the end of each period

Question

Quizplus · Accepted Answer

An ordinary annuity is a series of equally sized regularly occurring cash flows extending n periods into the future, with the cash flows occurring at the end of each period. This means that the payments are made at the end of each period, rather than at the beginning, and they are of equal size.

Which of These Answers Best Describes an Ordinary Annuity