Consider annuities which have equal payments spread over equal intervals of time. A simple or regular...

Consider annuities which have equal payments spread over equal intervals of time. A simple or regular ordinary annuity possesses two important properties. State these two important properties.

Expert Solution

Uniform payments and equal time intervals such as months, quarters or years, are the two characteristics that make a series of payments an annuity

The number of cash flows is fixed

The time interval between two cash flows is same

The cash flows are fixed

The cash flows occur at the end of the period

Annuities help both the creditor and debtor have predictable cash flows, and it spreads payments of the investment out over time

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