Q9Q

Expert-verifiedFound in: Page 301

Book edition
16th

Author(s)
Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield

Pages
1552 pages

ISBN
9781118743201

**Question:What are the primary characteristics of an annuity? Differentiate between an “ordinary annuity” and an “annuity due.”**

The annuity has periodic payment and rents occur in beginning in annuities due, rents occur at end of the period in an ordinary annuity

An annuity involves the following characteristics:

Periodic payments or receipts called rents,

Of the same amount

Spread over equal intervals

With interest compounded once each interval

In ordinary annuities, the rents occur at the end of the intervals but in annuities, due rents occur at beginning of each of the intervals or each time period

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