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

Question

Quizplus · Accepted Answer

A perpetuity is a stream of equal cash payments that lasts forever. An annuity is a similar stream of cash payments, but it lasts for a fixed number of periods. An annuity due is a special type of annuity where payments are made at the beginning of each period instead of at the end. Installment plans are not necessarily a stream of equal payments and may not last forever.

A Stream of Equal Cash Payments Lasting Forever Is Termed