Future value of annuities Which of the following statements about annuities are true? Check all that apply.A. An annuity is a series of equal payments made at fixed intervals for a specified number of periods. B. An annuity due earns more interest than an ordinary annuity of equal time.C. Ordinary annuities make fixed payments at the beginning of each period for a certain time period. D. An annuity due is an annuity that makes a payment at the beginning of each period for a certain time period. Which of the following is an example of an annuity? A. A lump-sum payment made to a life insurance company that promises to make a series of equal payments later for some period of time. B. An investment in a certificate of deposit (CD). Luana loves shopping for clothes, but considering the state of the economy, she has decided to start saving. At the end of each year, she will deposit $710 in her local bank, which pays her 4% annual interest. Luana decides that she will continue to do this for the next five years. Luana’s savings are an example of an annuity. How much will she save by the end of five years?A. $3,268.75 B. $3,160.79 C. $3,845.59D. $3,999.41 If Luana deposits the money at the beginning of every year and everything else remains the same, she will_________ save by the end of five years.

An annuity is a series of payments that is made at equal intervals. An annuity due makes payments at the beginning of each period while and ordinary annuity makes payment at the end of each period.

Since an annuity due makes payments at the beginning of the period, it does not earn the receiver as much interest as an ordinary annuity.

A lump-sum payment that is made to a life-insurance company that promises to make a series of equal payment for some period of time meets the definition of annuity given above. However, investing in a certificate deposit does not meet the definition of an annuity.

Using the compound interest formula, Lara will only earn interest on her first four payments since her final payment will be made at the end of the fifth year, which is when she ends the saving.

[tex]710(1.04)^{4} +710(1.04)^{3}+710(1.04)^{2}+710(1.04)+710[/tex]= 3845.59

If she deposited the money at the beginning of the year, at the end of 5year,she will have [tex]710(1.04)^{5} +710(1.04)^{4} +710(1.04)^{3}+710(1.04)^{2}+710(1.04)[/tex]=3999.41