When discussing time-value-of-money it is necessary to understand some key terminology. Which of the following terms refers to a fixed amount of money paid or received at the end of every period (i. e. a series of equal lump sums) ?

A. Future value

B. Present value

C. Ordinary annuity

D. Annuity due

Question

Business

Master

12 May, 08:18

When discussing time-value-of-money it is necessary to understand some key terminology. Which of the following terms refers to a fixed amount of money paid or received at the end of every period (i. e. a series of equal lump sums) ?

A. Future value

B. Present value

C. Ordinary annuity

D. Annuity due

+5

Answers (1)

Know the Answer?

Javier Romero · Answer 1

C. Ordinary annuity

Explanation:

The ordinary annuity is the sequence amount of an equivalent lump sum containing a fixed amount of money to be paid or earned at the end of each term. Periods here can be in weekly, monthly, semi-annual or semi-annual, or annual. The number should be the present value

Thus, the appropriate choice is c.

Therefore, all the remaining options are wrong

When discussing time-value-of-money it is necessary to understand some key terminology. Which of the following terms refers to a fixed amount of money paid or received at the end of every period (i. e. a series of equal lump sums) ?A. Future valueB. Present valueC. Ordinary annuityD. Annuity due