Assuming equal time intervals between the payments and a constant rate of return,which of the following cash flow patterns represents an annuity? $\begin{array}{|l|c|c|c|c|c|c|}
\hline & \text { Year 1 } & \underline{\text { Year 2 }} & \underline{\text { Year 3 }} & \underline{\text { Year 4 }} & \underline{\text { Year 5 }} & {\text { Year 6 }} \
\hline \text { A) } & \$ 1,000 & \$ 1,000 & \$ 1,000 & \$ 1,000 & \$ 1,000 & \$ 1,000 \
\hline \text { B) } & \$ 500 & \$-0- & \$ 500 & \$ 500 & \$ 500 & \$-0- \
\hline \text { C) } & \$ 100 & \$ 200 & \$ 300 & \$ 400 & \$ 500 & \$ 600 \
\hline
\end{array}$

Question

Quizplus · Accepted Answer

An annuity is a series of equal payments made at regular intervals. Option A represents an annuity because it consists of equal payments of $1,000 made every year.

Assuming Equal Time Intervals Between the Payments and a Constant