An ordinary annuity is characterised by: a. a series of cash flows that are identical in amount and occur at the end of consecutive time periods over a finite period of time. b. a series of cash flows that are identical in amount and occur at the start of consecutive time periods over a finite period of time. c. None of the answers are correct. d. a series of cash flows that are identical in amount and occur at the end of consecutive time periods over an infinite period of time. e. a series of cash flows that grow at a constant rate and occur at the end of consecutive time periods over an infinite period of time.
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An ordinary annuity is a type of annuity where the payments are made at the end of each period. Show more…
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An ordinary annuity is an account in which you make a fixed deposit at the end of each compounding period. You want to use an annuity to help you save money for college. The formula t = n * In(Sr + Pn) gives the time t (in years) required to have S dollars in the annuity if your periodic payments P (in dollars) are made n times a year and the annual interest rate is r (in decimal form). In[(Sr + Pn) * (Pn) * (n + r)] is the expansion of the formula. True b. False
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