All of the following are conditions for an annuity except
A) periodic cash flows must be equal in amount
B) the time periods between the cash flows are the same length
C) the interest rate is constant for each time period
D) the interest rate is compounded in the middle of each time period

Question

Quizplus · Accepted Answer

The interest rate in an annuity can be compounded at any point during each time period, not just in the middle. The other three conditions (equal cash flows, equal time periods, constant interest rate) are necessary for an annuity.

All of the Following Are Conditions for an Annuity Except