When Calculating the Present or Future Value of an Annuity

Multiple Choice

When calculating the present or future value of an annuity we assume:

A) The number of compoundings each year is independent of the payments per year.
B) The number of compoundings per year is equal to the number of payments per year.
C) The number of compoundings depends on the size of the payment.
D) The number of compoundings depends on the annual interest rate.