An ordinary annuity is a
A) Stream of unequal payments that occurs at the end of a period
B) Stream of equal payments that occurs at the end of a period
C) Stream of equal payments that occurs at the beginning of a period
D) Stream of unequal payments that occurs at the beginning of a period

Question

Quizplus · Accepted Answer

An ordinary annuity is a stream of equal payments that occur at the end of each period. This is in contrast to an annuity due, where the payments occur at the beginning of each period. A common example of an ordinary annuity is a mortgage payment, where the borrower pays the same amount each month at the end of the month.

An Ordinary Annuity Is a