Jacob Oram pay the same amount every month as insurance premium for a term life policy for a period of five years, the stream of cash flows is called a perpetuity.

Question

Quizplus · Accepted Answer

A perpetuity is a stream of equal payments that continues indefinitely, while Jacob Oram's insurance premium payments only continue for five years. Therefore, his stream of cash flows is not a perpetuity.

Jacob Oram Pay the Same Amount Every Month as Insurance