A stream of equal cash payments lasting forever is termed as:
A)an annuity.
B)an annuity due.
C)an installment plan.
D)a perpetuity.

Question

Quizplus · Accepted Answer

A perpetuity is a stream of constant cash payments that lasts forever. An annuity is also a stream of equal cash payments, but it has a fixed number of payments. An annuity due is similar to an annuity, but the payments are made at the beginning of each period instead of at the end. An installment plan refers to paying for a purchase over time, with fixed payments at regular intervals.

A Stream of Equal Cash Payments Lasting Forever Is Termed