If your investment pays the same amount at the end of each year for a period of six years, the cash flow stream is called

Question

Quizplus · Accepted Answer

An ordinary annuity is a cash flow stream that pays the same amount at the end of each period (in this case, each year) for a finite period of time. A perpetuity is a similar cash flow stream that continues indefinitely, and an annuity due is a cash flow stream where payments are made at the beginning of each period instead of at the end. Since the question specifies a finite time period, the correct answer is an ordinary annuity.

If Your Investment Pays the Same Amount at the End