If a series of equal payments is received regularly at the end of the year, and each is deposited immediately at the same interest rate, the ____ is the sum of all the payments and all the interest earned at the end of the series.
A)future value of an annuity due
B)present value of an annuity due
C)future value of an ordinary annuity
D)present value of an ordinary annuity
E)none of the above

Question

Quizplus · Accepted Answer

The scenario described is that of a future value of an ordinary annuity calculation, where the payments are received at the end of each period and there is interest earned on each payment. The future value of the annuity is the accumulated amount of all payments plus the interest earned on each payment at the end of the series. The other options, such as present value of an annuity due or future value of an annuity due, do not accurately describe the scenario given in the question.

If a Series of Equal Payments Is Received Regularly at the End