Annuity

__________ is a cash flow payment which continues indefinitely

• Annuity

• Perpetuity

• Sinking Fund

• All of the above

What is the main difference between an annuity and a compound interest investment?

• A series of payments is made for annuities.

• A series of payments is made for annuities.

• The cash value of annuities can be figured using the compound interest table.

• Annuities involve a series of payments of usually differing amounts, whereas compound investments involve regular contributions of equal amounts.

When is payment made on an ordinary annuity?

• Beginning of the period

• Middle of the period

• End of the period

• First 3 days of the period

When is payment made on an annuity due?

• Beginning of the Period

• First 3 days of the period

• Middle of the period

• End of the period

________ is a contract between you and an insurance company that requires the insurer to make payments to you, either immediately or in the future.

What is the main difference between an annuity and a compound interest investment?

• A series of payments is made for annuities.

• Annuities involve a series of payments of usually differing amounts, whereas compound investments involve regular contributions of equal amounts.

• The cash value of annuities can be figured using the compound interest table.

• Compound interest investments are for a shorter time period.

The amount of an annuity payment is based upon which of the following factors?

• Starting principal

• Income period

• Interest

• All of the above

Before the payout period begins, the annuity is in the

• Premium phase

• Accumulation phase

• Collection phase

• None of the choices

The principal reason for investing in annuities is:

• 
  to create an estate

• to leave an inheritance

• as a retirement tool

• All of the above

Since there is no possibility of loss, the insurer bears the burden of risk in a fixed annuity

• True

• False