Solved

Assuming Equal Time Intervals Between the Payments and a Constant

Question 1

Multiple Choice

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


A) A
B) B
C) C
D) Any of the answers can represent an annuity.

Correct Answer:

verifed

Verified

Related Questions

Unlock this Answer For Free Now!

View this answer and more for free by performing one of the following actions

qr-code

Scan the QR code to install the App and get 2 free unlocks

upload documents

Unlock quizzes for free by uploading documents