ECONOMICS
COMPOUND INTEREST
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Beginning of the period
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Middle of the period
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First 3 days of the period
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End of the period
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Detailed explanation-1: -An ordinary annuity is an annuity in which the cash flows, or payments, occur at the end of the period. The cash flows occur at the end of years 1 through 5. And the first cash flow occurs at the end of year 1.
Detailed explanation-2: -If the periodic payments are made at the end of each period, the annuity is called an immediate annuity or ordinary annuity.
Detailed explanation-3: -A life annuity will continue to make payments until the annuitant’s death. A fixed-term annuity will end when the term is up, with the remaining balance paid out in a lump sum or rolled over into another investment.
Detailed explanation-4: -A period annuity is for a specific amount of time – perhaps 5, 10, 15 or 20 years. You’ll get a payout either monthly, quarterly or yearly for the length of that period. You can also purchase a lifetime annuity, which pays out for the rest of your life.