Which stream of cash flows is not an example of an annuity?
A) Fixed rate mortgage payment
B) Mortgage payment where the interest rate is reset annually
C) 48 month car payment
D) Interest payment on a 10 year Treasury bond

Question

Quizplus · Accepted Answer

An annuity involves regular, fixed payments over a period of time. A mortgage payment where the interest rate is reset annually does not have fixed payments, as the amount can change each year, making it not an annuity.

Which Stream of Cash Flows Is Not an Example of an Annuity