If payment of security is paid as $100 at end of year for three years, it is an example of______________?
Correct answer: D. Annuity
- A. Fixed payment investment
- B. Lump sum amount
- C. Fixed interval investment
- D. Annuity
Explanation
Equal payments of $100 made at regular intervals for a limited number of periods form an ordinary annuity when paid at each year-end. A lump sum is a single payment, not a series.
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Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
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