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Question
In an ordinary annuity, payments or receipts occur at ______.
Options
Beginning of each period
End of each period
Mid of each period
Quarterly basis
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Solution
In an ordinary annuity, payments or receipts occur at end of each period.
Explanation:
Payments are made at the conclusion of each period (such as a month, quarter, or year) in an ordinary annuity. Bond interest payments, mortgage payments, and loan payments are typical instances. As a result, payments for an annuity due are made at the start of each period.
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