An equipment lease where the payments are due at the end of each month would be an example of a(n):
A) perpetuity.
B) annuity due.
C) ordinary annuity.
D) deferred annuity.

Question

Quizplus · Accepted Answer

Payments made at the end of each period, such as monthly payments in this case, define an ordinary annuity. An annuity due involves payments at the beginning of each period, a perpetuity involves infinite payments, and a deferred annuity involves payments starting at a future date.

An Equipment Lease Where the Payments Are Due at the End