Question

In an ordinary annuity, payments or receipts occur at

• A. Beginning of each period
• B. End of each period
• C. Mid of each period
• D. Quarterly basis

Hint:

Remember: "Ordinary" is what's most common or standard. Most loan payments (like for a car or mortgage) are due at the end of the month, making them ordinary annuities. "Annuity Due" is for payments made in advance (like rent).

Answer 1

The Correct Option is B

An annuity is a series of equal payments made at regular intervals. The key distinction between different types of annuities is the timing of the payments. In an ordinary annuity (or annuity immediate), the payments are made at the end of each payment period. In contrast, an annuity due has payments at the beginning of each period.