Question

Which statement defines an annuity?

Answer 1

Answer:

C. An annuity is an investment plan that guarantees payments at regular intervals after retirement.

Step-by-step explanation:  

Let us see our given choices one by one.

A. A retirement plan offered by employers.

As annuities are generally offered by insurance companies, therefore, option A is not a correct choice.

B. Since a group of investments that many individual investors hold in common is called mutual funds, therefore, option B is not a correct choice.

C. An investment plan that guarantees payments at regular intervals after retirement.

Since we know that annuity is a fixed amount of money paid to someone each year for the rest of their life. Annuities are primarily used as an income stream for retirees, therefore, option C is the correct choice.

Answer 2

An investment plan that guarantees payments at regular intervals after retirement

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