Trey Hughes opened a pizza place last year. He expects to increase his revenue from last year by 7 per cent every year for the next 10 years. This is an example of a growing annuity.

Question

Quizplus · Accepted Answer

A growing annuity is a series of cash flows that increase at a constant rate over time. In this case, Trey Hughes' expected revenue growth of 7% per year for the next 10 years fits the definition of a growing annuity.

Trey Hughes Opened a Pizza Place Last Year