Question
You are comparing two annuities that offer regular payments of $2,500 for five years and pay .75 percent interest per month. You will purchase one
You are comparing two annuities that offer regular payments of $2,500 for five years and pay .75 percent interest per month. You will purchase one of these today with a single lump sum payment. Annuity A will pay you monthly, starting today, while annuity B will pay you monthly, starting one month from today. Which one of the following statements is correct concerning these two annuities?
A. Annuity A is an ordinary annuity.
B. Annuity B is an ordinary annuity.
C. Annuity A should not be considered an annuity.
D. Both Annuity A and annuity B are annuities due.
E. Both Annuity A and annuity B are ordinary annuities.
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