We are given two annuity plans, A and B, and the amount invested into each plan every month. Given this information, determine which of the two investments is an ordinary annuity, and the amount invested over a 12 month period?
A. Investment A is an ordinary annuity with an annual contribution of $1,100
B. Investment A is an ordinary annuity with an annual contribution of $100
C. Investment B is an ordinary annuity with an annual contribution of $1,100
D. Investment B is an ordinary annuity with an annual contribution of $100

To understand annuity, think like you are saving same amount of money in bank after same period of time. Like, saving $100 every month. There are 2 types of annuity; ordinary annuity and annuity due. In the example given by me, ordinary annuity would be saving the money at the end of each month and annuity due would be saving the money at the start of each month. The payments are supposed to be equal at start or end of the consecutive period over a pre-defined length of time. Frequency of payments can be monthly, quarterly, semi annually or yearly.

profanthem profanthem · Answer 2 · 2020-01-15T07:17:31+01:00

profanthem profanthem

15-01-2020

Answer:

C. Investment B is an ordinary annuity with an annual contribution of $1,100

Explanation:

it was right on edge

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