Assuming equal time intervals between the payments and a constant rate of return, which of the following
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Question:
Assuming equal time intervals between the payments and a constant rate of return, which of the following cash flow patterns represents an annuity?
Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | Year 6 | ||||||||||||||||||
A) | $ | 1,040 | $ | 1,040 | $ | 1,040 | $ | 1,040 | $ | 1,040 | $ | 1,040 | |||||||||||
B) | $ | 560 | $ | 0 | $ | 560 | $ | 560 | $ | 560 | $ | 0 | |||||||||||
C) | $ | 120 | $ | 220 | $ | 320 | $ | 420 | $ | 520 | $ | 620 | |||||||||||
Multiple Choice
A
B
C
Any of the answers can represent an annuity.
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
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