The annuity in which periodic payments begin on a fixed date and continue forever is called :
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → Perpetuity
A perpetuity is an annuity whose payments begin on a fixed date and continue forever; its present value is \(\frac{R}{i}\) for a payment R per period at rate i.
A sinking fund is money set aside regularly to meet a known future expense, a mutual fund pools investors’ money to invest it, and a bond is a loan that is repaid on a fixed redemption date. None of them goes on forever.
CBSE Applied Mathematics (Class XII):
Perpetuity
