Allen Bell pays the same amount every month on a car loan for a period of three years. The stream of cash flows is called an annuity.

Question

Quizplus · Accepted Answer

An annuity is a series of equal cash flows that occur at regular intervals, usually monthly or annually, for a specified period of time. In this scenario, Allen Bell is making the same payment each month on his car loan, making it an annuity.

Allen Bell Pays the Same Amount Every Month on a Car