An annuity in which the first cash flow is to occur immediately is known as a/an:
A)ordinary annuity.
B)ordinary perpetuity.
C)annuity due.
D)growth annuity.

Question

Quizplus · Accepted Answer

An annuity due is where the first payment is made immediately, as opposed to an ordinary annuity where the first payment is made at the end of the period. A perpetuity is a type of annuity that continues indefinitely and has no end date. A growth annuity is a type of annuity that grows at a specified rate over time. Therefore, the best choice is C, annuity due, as it specifically refers to an annuity with immediate cash flow.

An Annuity in Which the First Cash Flow Is to Occur