Assuming Equal Time Intervals Between the Payments and a Constant

Assuming equal time intervals between the payments and a constant rate of return, which of the following cash flow patterns represents an annuity? $\begin{array}{rrrrrrr}&\text { Year } & \text { Year } & \text { Year } & \text { Year } 4 & \text { Year }5& \text { Year } 6 \\\text {A) }&\$ 1,360 & \$ 1,360 & \$ 1,360 & \$ 1,360 & \$ 1,360 & \$ 1,360 \\\text {B) }&\$ 1,040 & \$ 0 & \$ 1,040 & \$ 1,040 & \$ 1,040 & \$0\\\text {C) }&\$280&\$380&\$480&\$580&\$680&\$780\end{array}$

A) A
B) B
C) C
D) Any of the answers can represent an annuity.

Correct Answer:

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