Question

An ordinary annuity is best defined as: a. equal payments paid at the beginning of regular intervals for a limited time period. b. increasing payments paid for a definitive period of time. c. equal payments that occur at set intervals for an unlimited period of time. d. equal payments paid at the end of regular intervals over a stated time period. e. increasing payments paid forever.

Answer 1

Answer: Option D

 

Explanation: In simple words, ordinary annuity refers to a fixed amount of payments made at the end of a specified period. The annuity in which the payment is made at the end of the period is called annuity due and not ordinary annuity.

For example- amount of periodic interest made on the bonds.

Hence from the above we can conclude that the correct option is D.